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  • Anti-Bribery I Risk I Compliance Management

ISO 37001 Certification Advantages

ISO 37001 Certification Advantages. Bribery is a key issue in both local markets and global business activities. The desire to expand business operations and maximise commercial profits requires identifying and managing operational risks and identifying and mitigating bribery risks. And having an Anti-Bribery Management System in place is a powerful tool to build and maintain a positive image with business partners and authorities and consumer confidence. ISO 37001 certification demonstrates your dedication to implementing and maintaining a compliant and effective anti-bribery management system supporting overarching principled business practices. The ISO 37001:2016 international standard can be applied to distinguish and protect a wide range of organisations of all sizes in public and private sectors worldwide.

It is important to note that business expansion tends to involve bureaucratic processes, thus exposing an organisation to bribery risks to either fasten bureaucratic processes or even in lobbying for a favourable operating business climate. Of note, bribes need not be monetary and maybe in kind, often in favours such as trips, meals, and other inducements that may influence favourable decisions. The global legislation on corruption recognises trading in influence as a form of corruption (Norton Rose Fulbright, 2017). 

While strategic management is geared towards maximising profits, organisations need to involve themselves in ethical and transparent dealings. Often, management and business personnel participate in corruption and bribery activities to facilitate their entry and continued presence in the market. 

This article discusses and argues that the ISO anti-bribery management system certification is beneficial to businesses. In particular, the article reviews four broad benefits of anti-bribery management. This article will emphasise the benefits of ISO 37001:2016 anti-bribery management system certification by characteristically portraying companies and organisations as entities that must internally comply with the international anti-bribery standards to promote their brand and obey laws thus strategically increasing their competitiveness and overall profitability. 

First, the article postulates that adopting and complying with the ISO 37001 anti-bribery management system certification allows an organisation to conduct ethical business by implementing a viable anti-bribery management program. The ISO anti-bribery management system acts as an instructive and exhaustive guide in identifying bribery risks and formulation of viable bribery risk management practices (Center for Responsible Enterprise And Trade, 2014). 

Secondly, the article reviews how the anti-bribery management system enhances confidence among the management, employees, and other stakeholders that an organisation is actively pursuing internationally recognised and accepted processes to prevent bribery and corruption. 

Third, the article discusses the accruing benefit associated with the protection of an organisation’s assets and the interests of various stakeholders from the effects of corruption. If found guilty, the management may be subject to imprisonment while the organisation may receive sanctions of fines or orders of winding up. As such, it is highly desirable to avoid bribery and corruption. Lastly, the due diligence and internal investigation procedures recommended by the ISO 37001 anti-bribery management system allows an organisation to adduce evidence to show that it has taken reasonable steps to prevent bribery and corruption.

Implementing a viable anti-bribery management program utilising widely accepted controls and systems

The ISO anti-bribery management system is a cornerstone of a strategic approach to bribery risk identification and subsequent mitigation of bribery risks. For instance, knowledge of risk is necessary for the effective management process of such risks. Additionally, using the tested principles and practices of the ISO anti-bribery management system allows an organisation to tailor the recommendations in the ISO anti-bribery management system to its contextual business environment. Therefore, it is necessary to discuss how the viability of the anti-bribery management program is of benefit to an organisation.

One key feature of the ISO 37001: 2016 anti-bribery management program is the integration of best practices in whistle-blowing procedures (Valerio, 2017). By integrating whistle-blowing protection in its internal anti-bribery practices, an organisation implements a viable anti-bribery management program that encourages employees to come forward with knowledge on ongoing corruption (Gordon & Miyake, 2001). Usually, employees are the first people aware of bribery and corruption practices within an organisation. It is important to note that information obtained through whistle-blowing is not always factual, thus the need to conduct due diligence and verification.

Notably, the ISO 37001:2006 has impacted making companies adhere to the International Anti-Bribery Management System Standard. As an international standard of high repute, ISO 37001 has brought tremendous changes to market dealings and firm operations. Organisations have a guideline of rules and code of ethics to mitigate the risk of being involved in corruption charges. When dealing, terms of engagement have been laid down, and each organisation and other market players know what is legal and acceptable. Furthermore, the ISO 3700 contains pre-existing policies and guidelines familiar to some organisations. It only added a few regulations to existing policies. These include reporting, monitoring and correction measures targeting the offenders (Cottrell, 2016). This has made it easier for the organisations to comply with them as they have been engaging them in the past.

Companies have to comply with the new regulations before engaging in any business. Fighting corruption in organisations and business transactions has been made easier and more achievable. Specifically tailored rules of engagement for different organisations ensure that they can stop or even prevent bribery cases when or before they occur.

1. Stakeholder assurance that the organisation is actively pursuing internationally recognised and accepted processes to prevent bribery and corruption

The international nature of the ISO anti-bribery management system allows organisations to align their internal policies on corruption with the country’s domestic laws. It is important to note that state-nations are increasingly domesticating the global legal framework on anti-corruption and actively prosecuting offenders. Therefore, the international ISO anti-bribery management system is important to a company as it formulates its internal policies on anti-bribery and anti-corruption in accordance with international and domestic legislation on anti-corruption in both the public and private sector.

The assurance that an organisation is operating within international standards and processes helps cultivate social legitimacy in the operation of a company, which directly boosts investor confidence and attracts investors. Also, some consumers base their purchase decisions on ethical operations. The ISO standard serves as a pull factor for new consumers. Bribery is a serious issue with adverse macroeconomic and microeconomic effects (Valerio, 2017). In particular, it distorts markets and competition and erodes the profitability of private firms and individual enterprises throughout an economy.

The ISO 37001:2016 anti-bribery management system provides measures that help organisations prevent, detect, eradicate and address bribery. This is done by adopting anti-bribery policies, hiring personnel to oversee anti-bribery compliance risk management and diligence on projects and business associates, implementing commercial and financial controls, and reporting and investigation procedures. ISO 37001:2016 can only be used in any organisation regardless of its size, public or private or non-profit organisations.

The ISO 37001:2016 anti-bribery management system allows organisations to incorporate international standards of preventing bribery in their routine day to day operations. Put differently, it helps the organisation improve performance by orienting the organisational culture towards transparency and eradicating bribery. Such an organisational culture allows the design of goals, objectives and missions that promote due diligence and monitoring and evaluation to identify and mitigate bribery risks (Valerio, 2017).

Identification and resolution of bribery risks increase an organisation’s capacity to deliver consistent and improved satisfactory services to consumers within the law and without engaging in bribery and corruption. In addition, the anti-bribery management system improves how the organisation protects its people from fraud and ensures a favourable working environment. Therefore, the ISO 37001:2016 anti-bribery management system enhances transparency in organisational culture, thus promoting the optimisation of resources.

Investors are another important entity. When investors invest in any organisation or market, such as the stock market, they need to be protected from scrupulous businesses. The system allows them to have genuine business deals free from bribery. Since in many markets, for example, the stock market, many players like to use shortcuts in the name of bribes, as demonstrated by insider trading of stocks and options in the markets. Integrating an anti-bribery management system in routine operations allows organisations to use international standards to detect and mitigate probable apparent forms of bribery. Thus, ISO 37001 ensures sanity and fairness in the market.

The ISO 37001:2016 anti-bribery management system also levels the market by eradicating unfair commercial practices of bribery that distort a section of the market to the whole market. Of note, bribery and trading in influence is a common practice among multinational corporations operating in developing nations. Often, bribes affect markets by distorting markets to the extent that the bribing organisations operate outside the law where they flout systems such as tendering and supply chains, thus landing lucrative business deals with minimal attention paid to merit. As such, the commitment of businesses to the ISO 37001:2016 anti-bribery management system boosts investor confidence, thus facilitating investment and healthy competition. It is important to note that bribery can also be used in recruitment; by embedding ISO 37001:2016 anti-bribery management system in its recruitment practices, an organisation benefits by hiring the best-fit talent. As such, the organisation boasts of job and talent matches necessary for employee confidence and job satisfaction, which translates to increased employee productivity.

2. Protection of the organisation, its assets, shareholders, and directors from the effects of corruption

Protection of the organisation’s assets, shareholders and management from the adverse effects of bribery and corruption is another benefit associated with the ISO anti-bribery management system. Often, the negative effects of corruption are economical. For instance, bribery affects a company’s profit margins to the extent that the management has to divert funds meant for operating capital or assets capital to facilitate bribes. Additionally, the public knowledge that an organisation is actively involved in bribery or any other form of peddling influence affects brand identity, which erodes the consumer base, thus reducing the overall profitability of an organisation.

Bribery is one of the world’s most destructive habits. Responsible for the loss of an annual monetary figure of $1 Trillion, this vice has demoralised institutions and nations. In appreciating the catastrophic effects of this vice, ISO designed a system capable of sealing loopholes against bribery in organisational systems. Specifically, the ISO 37001:2016 creates precise measures that assist in detecting, preventing, and addressing bribery occurrences in institutions (Center for Responsible Enterprise And Trade (CREATe), 2016). This ISO process focuses on two bribery angles. One, it addresses how bribery by the organisation can occur. Here, the certification demands identifying either the business or the associates who have handled a bribe deemed to benefit the organisation. Two, it addresses cases where the organisation has received a bribe. In this scenario, it is the reality where a business or its associates has received or given a bribe in relation to the activities conducted by the entity.

Through integration, this system can operate as a stand-alone facility or function under another system. The tool is available for all organisations regardless of purpose or objectives. Therefore, commercial organisations, not-for-profit entities, and governments are free to apply it to achieve anti-bribery compliance. One advantage that cuts across all organisations is the amplification of confidence in the eyes of external stakeholders. From another perspective, an organisation using this ISO format is assured of a good reputation and an excellent working environment. The risk factors are minimised, and a solid credential pathway is realised. Indeed, many for-profit outfits have consistently applied anti-bribery systems as a measure of acquiring extensive market penetration goals. The ISO 37001 typically seeks to create an accountability culture around the globe that can have organisations conduct activities in a clean and healthy environment. For the business world, ISO 37001 is packaged to breed a set-up full of trust in a way that can sustain and grow commercial activities. Simply, it is a system that seeks to make the world an honest place.

Corruption can permeate every corner of an organisation, and the anti-bribery certification blocks such realities. An organisation with an ISO: 37001 2016 certification is open to public scrutiny since its management operates without fear. Further, such an entity displays fidelity and compliance to bribery legislation such as acts of parliament or the congress. More importantly, subscribing to the system certification demonstrates a commitment to collaborate and work with like-minded organisations in managing bribery and corruption in the world. The chain of responsibility and accountability ensures that the supply chain systems used by the organisations conduct clean and verifiable business. Closely related to that advantage is the growth of moral and legal business transactions between businesses and contractors.

The ultimate beneficiary of ISO: 37001 is the shareholder. When an organisation bribes its way into the business and takes its license away, the shareholder loses their investment. If credibility is lost and the activity schedule goes down, the shareholder bears the heaviest burden. However, bribery in organisations practically affects everyone in such a company’s political, commercial or social jurisdiction. Disgrace can lead to the loss of jobs. Still, a fined or closed company implies lower tax revenues to the government. Therefore, businesses should integrate ISO: 37001 2016 in their management operations and risk and compliance.

3. Provision of acceptable evidence to prosecutors or courts that the organisation has taken reasonable steps to prevent bribery and corruption

The ISO certification embeds a culture of corporate social responsibility and willingness to collaborate with law enforcement agencies. Cognisant of the backlash and opprobrium associated with corporate obstruction of justice in the investigation of bribery and corruption, the ISO certification allows organisations to document their proactive involvement in reviewing their compliance with global standards of anti-bribery management as well as the concrete measures the management has initiated to show its willingness to prevent and curb bribery risks.

It is important to note that organisations have a distinct legal personality away from the management and other stakeholders. An organisation’s separate legal personality means that an organisation is liable for bribery activities committed by its employees or management. Under domestic laws, culpable organisations are subject to legal sanctions, which include hefty fines and, in some cases, dissolution of the organisation. Pecuniary fines affect a company’s operations by diverting either operating capital or assets to unintended activities. Overall, diversion of financial resources to foot fines affects a company’s profitability as well. In addition, such diversion of financial resources through fines affects growth strategies such as expansion into new markets. In this case, the provision of documented evidence to the prosecution or the courts demonstrates that an organisation has taken reasonable measures to prevent bribery and corruption, thus helping the organisation avoid fines and sanctions such as winding up.

The ISO certification system offers the best strategies to manage an organisation in the face of bribery and corruption risks. The management has a huge role in identifying bribery risks in a bid to maximise an organisation’s efficiency and productivity. Of note, ISO: 37001 2016 allows organisations to identify risks and formulate key performance indicators to monitor and evaluate how an organisation acts within the law and conducts ethical business. In sum, the ISO: 37001 2016 certification not only facilitates the war against corruption in business environments but also promotes the efficiency and productivity of an organisation.

About us

Anti-Bribery Anti-Corruption (ABAC®) Center of Excellence powered by CRI Group, is an independent certification body that provides education and certification services for individuals and organisations on a wide range of disciplines and ISO standards, including ISO 31000:2018 Risk Management- GuidelinesISO 37000:2021 Governance of OrganisationsISO 37002:2021 Whistleblowing Management System, ISO 37301:2021 (formerly ISO 19600) Compliance Management systemAnti-Money Laundering (AML) and ISO 37001:2016 Anti-Bribery Management Systems.

ABAC® is accredited by the United Kingdom Accreditation Service (UKAS CB number: 10613) against ISO/IEC 17021-1:2015 Conformity assessment — Requirements for bodies providing audit and certification of the scheme’s management systems of ISO 37001:2016 Anti-Bribery Management Systems (ABMS). This makes ABAC® Certification the leading accreditated certification body specialising in global anti-bribery and anti-corruption, risk and compliance management system standards.

ABAC® offers a complete suite of solutions designed to help organisations mitigate the internal and external risks associated with operating in multi-jurisdiction and multi-cultural environments while assisting in the development of frameworks for strategic compliance programs. If you are seeking to validate or expand your existing anti-bribery, risk and compliance frameworks to maintain a competitive edge in the world marketplace ABAC® can help you. Our experts audit your existing compliance and anti-bribery anti-corruption management systems to assess effectiveness and vulnerabilities, while ensuring your organisation complies with Internal Standards, FCPA rules, UK Bribery Act laws, Anti-Money Laundering regulations, and all other global, regional and local regulations.

 

Regerences:

  1. Center for Responsible Enterprise And Trade (CREATe). (2016). Top 10 Takeaways of the ISO 37001 Anti-Bribery Management Systems Standard. Center for Responsible Enterprise And Trade (CREATe). Retrieved from https://create.org/wp-content/uploads/2016/09/CREATe-ISO-37001-Guide-eBook-Final-9.27.16.pdf
  2. Center for Responsible Enterprise And Trade. (2014). Addressing corruption risk through enterprise risk management. Center for Responsible Enterprise And Trade. Retrieved from https://create.org/wp-content/uploads/2014/12/create_whitepaper_ac_2014.%C6%92.single_lo.pdf
  3. Cottrell, E. (2016, December 13). ISO 37001- The Potential Impact of the New International Anti-Bribery Management System Standard. Retrieved from http://pcgc.parkerpoe.com/iso-37001-the-potential-ipact-of-the-new-international-anti-bribery-management-system-standard/
  4. Gordon, K., & Miyake, M. (2001). Business approaches to combating bribery: A study of codes of conduct. Journal of Business Ethics, 34(3), 161-173.
  5. Norton Rose Fulbright. (2017, February). Business ethics and anti-corruption world. Norton Rose Fulbright. Retrieved from http://www.nortonrosefulbright.com/files/business-ethics-and-anti-corruption-world-issue-5-146709.pdf
  6. Valerio, B. (2017). Corruption and ISO 37001: A new instrument to prevent it in international entrepreneurship. World Journal of Accounting, Finance and Engineering, 1, 1-14.