This informal CPD article on Significance of ISO 37001 Anti-Bribery Systems for Organizations was provided by Punyam Academy, an industry leader in training of international compliance standards.
Bribery – a form of corruption– is an international concern which is detrimental to good governance, justice and human rights and impacts development of businesses, organizations, governments and nations as a whole. Bribery increases the overall cost of products and services of the organization as well as jeopardizes the credibility and trust of the organization and its people. Hence, there must be some system to mitigate the menace of bribery.
Although governments, regulatory authorities and many international organizations have made laws, rules and regulations to control bribery, and punish those involved in this vicious act, they alone are not sufficient to address the widespread issue of bribery. Organizations themselves need to have their own anti-bribery system. In this context, an ISO 37001 anti-bribery system is significant for all types and sizes of organization to avoid or mitigate the costs, risks and damage of involvement in bribery, to promote trust and confidence in business dealings and to enhance its trust and reputation.
What is the ISO 37001 anti-bribery system?
The ISO 37001 anti-bribery system is a management system based on ISO 37001: 2016 standard published by the International Organization for Standardization (ISO). This international standard is based upon existing guidance from the International Chamber of Commerce, Organization for Economic Co-operation and Development (OECD), Transparency International, and other organizations and also incorporates guidance issued by leading international regulators such as the US Department of Justice, US Securities and Exchange Commission, and UK Ministry of Justice. The key principle of ISO 37001 is that the prevention of corruption must be reasonable and proportionate to the risks of each organization.
An ISO 37001 anti-bribery system addresses bribery (both direct and indirect through third-party) by the organization, its personnel, and business associates in the public, private and not-for-profit sectors. It also addresses bribery of the organization its personnel, and business associates in relation to the organization’s activities.
The ISO 37001 anti-bribery system helps organization to combat bribery by preventing, detecting and responding to bribery. By using this management system, organizations can avoid or mitigate the costs, risks and damage of involvement in bribery and promote trust and confidence in business dealings, and enhance the reputation of the organization.
How does an ISO 37001 anti-bribery system work?
An ISO 37001 anti-bribery management system prevents, detects and addresses bribery mainly by:
- Formulating and adopting an anti-bribery policy aligned to the vision and mission of the organization. Anti-bribery policy provides a framework for setting, reviewing and achieving anti-bribery objectives of the organization. The policy is deployed throughout an organization by cascading the anti-bribery management system objectives to relevant functions and levels.
- Assessments of bribery risks - A risk assessment identifies the bribery risks deemed by the organization to be a priority for bribery risk mitigation, control implementation and allocation of anti-bribery compliance personnel, resources and activities.
- Anti-bribery awareness and training of personnel, taking into account the bribery risks identified by the organization. This helps personnel to know how to recognize and respond to solicitations or offers of bribes and how they can help prevent and avoid bribery.
Having assessed the relevant bribery risks, the organization determines the type and level of anti-bribery controls that need to be applied to each risk category, and whether existing controls are adequate. If not, the controls are appropriately improved.
In an ISO 37001 anti-bribery management system due diligence on projects, personnel and business associates is undertaken and a person/ committee is appointed by the top management to oversee anti-bribery compliance. Based on risk assessment, appropriate financial and commercial controls as well as reporting and investigation procedures are established and implemented.
Why the ISO 37001 anti-bribery system is significant for organizations?
Even though it is not possible to completely eliminate the risk of bribery, a well implemented ISO 37001 anti-bribery management system helps the organization in enforcing reasonable and proportionate measures to prevent, detect and respond to bribery. ISO 37001 is significant for organization as it provides a systematic approach to mitigate the risk of bribery. An ISO 37001 anti-bribery management system can benefit organization by:
- Reducing bribery risk.
- Reducing cost and increasing profitability.
- Improving communication.
- Improving internal management.
- Increasing trust of stakeholders as well as market credibility.
- Improving employees’ confidence.
- Improving compliance with applicable standards, legislations and code of practices.
- Enhancing image of the organization.
Despite these silver linings, organizations should keep in mind that a ISO 37001 anti-bribery management system alone cannot provide complete assurance that no bribery has occurred or will occur, as there may be some factor, mainly external factors, which could not be addressed by the organization’s anti-bribery management system.
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