As you can assume from the term Bribery Act it essentially is a piece of legislation that has been produced to counter bribery from taking place within an organisation. Moreover the act also includes businesses that you deal with. It is this aspect that will become a significant issue for many business owners.
What the Bribery Act will increase is the potential prosecution of corporations based in the UK however it has been noted that the Bribery Act does have the potential to also have a positive impact on UK corporates in the long term.
The legislation states that an organisation must be able to convey they have quality controls in place and controls that go to other companies the business deals with such as suppliers, customers, contacts etc. As this is new legislation it does mean that a business may have to alter the way they have ‘done business’ for decades which to some is a severe inconvenience.
What the legislation is abundantly clear about is that organisations are in charge of making sure they abide by all the rules and regulations to the nth degree and to make sure everything that is taking place in their organisation is 100% above board and legal. The big difference is that companies are now going to be held accountable for their third party dealings which for years have been classed as ‘out of their control’.
The penalties that are going to be handed out for breaking the legislation could be as severe as prison for a guilty individual and uncapped fines for companies. Furthermore, you will need to consider the huge legal teams that will need to be brought in to handle these cases and the costs of these will be enormous. Essentially what the legislation is doing is removing the company’s ability to sub contract out risk to other parties to remove accountability. Third party businesses now need to be looked upon as part of your own company, which certainly is going to add complications to many existing working relationships.
With the struggling economy many businesses feel this is more legislation that will ultimately cost them more resource and money, however depending on how you want to perceive the new legislation, it could be a very good thing for businesses. The Bribery Act provides extremely clear guideline of how you can deal with third parties and what will be viewed as unacceptable, which ultimately means any legal issues can be avoided easily. Before this act was introduced it was quite a vague subject and as a result companies have been unsure how to act accordingly, now there should be no way to misunderstand.
As stated above the new legislation could alter existing relationships between companies however this is not necessarily a bad thing. It means that businesses need to review the relationship and perhaps renegotiate the agreement in place to adhere to the new guidelines more closely.
Of course one of the main costs that this will bring is more money being spent on businesses becoming compliant, however we do feel this is a worthwhile cost when weighed up against the saving in future legal costs, risk to reputation and an opportunity to remove costs from a business through the review process.