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Compliance considerations for global companies

Pooja Bedi (puja.mails@gmail.com) is a corporate lawyer and compliance professional based in Gurgaon, India, and was recognized as the “Rising Star—Under 40 In-house Counsel” by the Legal Era Foundation in 2017.

A recent report from an EY survey on compliance risk, bribery, and corruption suggests that a large number of business organizations and leaders believe that there is at least a 40% probability that businesses in emerging markets operate in a compromised way; however, only about 12% of incidences are duly reported.[1] The survey is a must read for all compliance professionals attempting to manage an emerging market risk portfolio, especially in highly regulated industries with multiple government touchpoints. It shows a stark contradiction where, on one hand, 97% respondents agree that integrity is the most important value for an organization, but on the other hand, as many as 20% justify cash payments to help the business survive. More than 52% of those questioned say that corruption practices are more widespread in emerging markets, compared to just 20% in developed markets.

The disconnect, as I see it, is in the fact that perceived levels of bribery and corruption in emerging markets have doubled compared to those in developed markets since the 2012 survey, and this is despite significant improvement in regulations, enforcement actions, awareness, purported ease of doing business, and large investments by organizations in compliance teams and protocols.

Compliance efforts today are more structured. They are backed by new technologies and the use of data insights, a whole new AI platform dedicated to managing compliance risks, and digital compliance tools that help in predictive analytics and real-time risk alerts while being integrated into a forensic data analytic system. But there are more and more disclosures on compliance failure, lack of integrity displayed by leaders in power, and corporate wrongdoing scandals one after the other. Something’s amiss—right?

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