Preparing your business for the UK Bribery Act

The UK Bribery Act comes into force on 1 July 2011. The Act is yet another burden facing SMEs, many of whom are still struggling to survive the recession.

Please don’t be fooled into thinking the Bribery Act only affects large multi-national companies. There are also implications for small businesses.

The Government has said that it doesn’t expect ‘genuine hospitality” or similar expenditure to fall under the Act but many companies are concerned that accepting corporate gifts – such as event tickets or bottles of wine – may expose them to accusations of bribery. So, where does one draw the line?

The Act creates three new criminal offenses of bribery:

• When a person bribes another person
• When a person requests or receives a bribe
• When a corporate entity fails to prevent bribery

So, failing to prevent bribery will become an offence in itself, punishable by unlimited fines and even the possibility of a 10-year prison sentence. The only defence will be having “adequate procedures” in place to prevent bribery.

Therefore as a starting point, all businesses should consider adding bribery and corruption to offences specified in employment contracts, disciplinary procedures and policies.

Many local businesses are now seeking advice on the “adequate procedures” to put in place. Turnstone’s HR team is providing advice and guidance to make it practical and comprehensive for local SMEs.

So, how can you protect yourself against the Act? And what exactly constitutes “a bribe”? Well, technically any attempt to influence an individual involved in a contract-awarding process could constitute a bribe. This includes excessive entertaining/hospitality or giving of gifts.

The Six Principles – how to prevent bribery in your business

Clear and accessible policies and procedures

Your employment contracts must be updated so they cover all risks such as gifts and hospitality, promotional expenses and charitable contributions.

Risk assessment

This assessment should become routine. It also need to be documented. Among the commonly identified risks are deficiencies in employee training, skills and knowledge.

Top-level commitment

You must encourage a culture in which bribery is unacceptable in your business. This means regular communication from top-level staff about the company’s anti-bribery policies.

Due diligence

You should be seeking reciprocal anti-bribery agreements, and making all business relationships transparent and ethical.

Effective Implementation

Anti-bribery must become part of your organisation’s internal communications, training, recruitment and remuneration policies.

Monitoring and review

Regular staff surveys and feedback from training.