Karina Litvack, Director Governance and SRI commented,

-Recent legislative developments suggest that the threats to business posed by operating in highly corrupt environments are rising. The 1997 OECD convention against bribery has spawned enabling legislation that prohibits the payment of bribes to foreign officials throughout the OECD. Although many respondents claim to be aware of these legislative developments, alarmingly few are able to demonstrate to shareholders that they have implemented reliable systems to manage this set of risks”.

Karina Litvack continued, -Bribery and corruption can potentially damage a company’s reputation for integrity – essential in securing customers, joint venture partners, high quality staff, local community acceptance and access to capital. This study raises serious concerns about how companies are managing this issue. In light of the new corporate disclosure standards contained in the ABI Guidelines on Corporate Social Responsibility, we would like to see those companies faced with a material risk provide convincing assurances to shareholders that they are appropriately managing them.”

The Prince of Wales International Business Leaders Forum, which provided assistance in the collation and evaluation of the survey responses, -welcomes the publication by Friends Ivory & Sime of The Governance of Bribery and Corruption: A Survey of Current Practice as a significant contribution to a subject that is receiving greater attention than ever before. Indeed the International Business Leaders Forum (IBLF) intends to make use of the results of the survey in support of its recently commenced Business & Corruption programme. Investors have an important part to play in encouraging improved standards of transparency and governance from the companies in which they invest, and it is heartening to see a major fund manager leading the way. –