Big corporates around the world are still impacted by heavy illicit activity, with over half of respondents in a new survey stating a significant impact during 2020.
Kroll’s Global Fraud and Risk Report found that 57% of companies with a turnover of over $15bn reported significant impact from illicit activity, such as fraud, corruption and money laundering on their organisation. Furthermore, 25% described the impact as somewhat significant.
Companies with slightly lower revenue, between $10bn and $15bn, also experienced high threats in 2020. It claims 48% had been significantly impacted and 44% reported a somewhat significant impact.
The report also found that businesses are placing increased protective measures in place to manage bribery and corruption risk. Of the respondents, 82% are using enterprise-wide risk assessments and 86% leverage proactive data analytics.
Furthermore, 72% said bribery and corruption issues were given sufficient board-level attention and investment.
However, regardless of these defences, 82% of people felt corruption and illicit activity has a major impact on their organisation.
Fears are around both internal and external threats, with 46% of respondents citing lack of visibility over third parties as the number one threat related to bribery and corruption risk. It also states weaknesses in internal recordkeeping is the second highest concern, with 31% worried about it.
Kroll managing director Zoe Newman said, “It has been an unprecedented year for corporate risk, with firms simultaneously facing threats from all angles, including increasingly complex supply chains and the impact of COVID-19 measures.
“While it is good news that so many organisations are bolstering defences with proactive measures such as data analytics and that bribery and corruption risk is on the boardroom agenda, the findings from this year’s report leave us with an important question: Why are bribery and corruption threats persisting and still having such a big impact? Poor record-keeping or the inability to adequately monitor frontline teams and regional offices are typical vulnerabilities that are often overlooked.
“Then there’s the human factor: An organisation can have the best possible compliance program in place on paper, but if the human elements of the chain aren’t well managed, educated or equipped to act, non-compliance or illicit behaviour will continue to prevail and go undetected.”
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