Domestic Business Issues
Foreign Corrupt Practices Act
To be successful, companies must conduct business internationally. There have been many cases of corrupt business practices, such as bribing foreign officials and money laundering. The Foreign Corrupt Practices Act (FCPA) was created to address these issues. The following discusses risk management and the board of directors, managing compliance risk, anti-corruption trends, and how supplier codes can help handle third-party risks.
Risk management and the Board
Cultivating an ethical corporate climate on the Board of Directors is essential to risk management strategies, mitigating corruption, and implementation of the firm’s “cultural and business operations.” Legal issues relative to corruption start with the Boards; an ethical Board can mitigate many issues even though “companies need to incur risk in order to run their businesses” (Lipton, 2010). Risk oversight is a highly anticipated Board responsibility and damage control is an even greater responsibility.
A framework for assessing risk management was developed in the Delaware court system, which determined limited liability “for a failure of board oversight” (In re Caremark International Inc. Derivative Litiga- tion, 698 A.2d 959, 971 (Del. Ch. 1996)) under conditions of failure to communicate ethical responsibility. The board must demonstrate the capacity to design policy and procedures that are in line with best practice strategic planning. The board monitors that a risk-awareness climate is adhered to and that every stakeholder is “engaged in risk management.” Board operations establish the tone of the corporate culture and there should be no space between the company and the board on issues of ethics, transparency, consistency and communication, and the anticipation of risk.
Managing Compliance Risk
For over a decade, the federal government has taken a stance against the corruption in the corporate landscape. Many federally enforced laws are addressing corporate
To be successful, companies must conduct business internationally. There have been many cases of corrupt business practices, such as bribing foreign officials and money laundering. The Foreign Corrupt Practices Act (FCPA) was created to address these issues. The following discusses risk management and the board of directors, managing compliance risk, anti-corruption trends, and how supplier codes can help handle third-party risks.
Risk management and the Board
Cultivating an ethical corporate climate on the Board of Directors is essential to risk management strategies, mitigating corruption, and implementation of the firm’s “cultural and business operations.” Legal issues relative to corruption start with the Boards; an ethical Board can mitigate many issues even though “companies need to incur risk in order to run their businesses” (Lipton, 2010). Risk oversight is a highly anticipated Board responsibility and damage control is an even greater responsibility.
A framework for assessing risk management was developed in the Delaware court system, which determined limited liability “for a failure of board oversight” (In re Caremark International Inc. Derivative Litiga- tion, 698 A.2d 959, 971 (Del. Ch. 1996)) under conditions of failure to communicate ethical responsibility. The board must demonstrate the capacity to design policy and procedures that are in line with best practice strategic planning. The board monitors that a risk-awareness climate is adhered to and that every stakeholder is “engaged in risk management.” Board operations establish the tone of the corporate culture and there should be no space between the company and the board on issues of ethics, transparency, consistency and communication, and the anticipation of risk.
Managing Compliance Risk
For over a decade, the federal government has taken a stance against the corruption in the corporate landscape. Many federally enforced laws are addressing corporate