In the second part of a Front-Line Interview, Control Risks CEO, Richard Fenning, addresses the deployment of due diligence as elevating, enhancing, and complementing a sensible risk-based approach to corruption risk. In this engaging Q and A, Mr. Fenning also details:
- The need to embed corruption risk into business strategy.
- The possibilities of engaging in regions and territories that have a high degree of historical corruption risk, but where multinationals might have an opportunity to “pick and choose between sectors” where lower risk opportunities exist.
- How organizations need to be able to understand the changes in local governance in order to “act according to trends and differences.”
- The “incremental, slow and powerful change” which is occurring in global markets and how to “harness that change for market advantage.”
- How a compliance policy of ‘zero tolerance’ needs to “have financial and commercial teeth in the field,” in terms of “being willing to bear the consequences” of how that might impact business strategy and forecasts.
- How compliance can not expect ‘zero tolerance’ to corruption risk while “demanding the same commercially.”
- How compliance teams can’t “overnight click your fingers” and “expect people to change with the same commercial expectations.”
With respect to due diligence, Mr. Fenning explains:
- How due diligence as a “piece of paper to show the regulators… drilled down to its cheapest outcome is worthless.”
- How the “fig leaf of deniability will only go away when due diligence is used properly.”
- How a risk-based approach to due diligence with “sensible criteria” allows organizations “to allocate diligence resources where they are most likely needed.”
- How “purposeful, useful due diligence does not have to break the bank in the process.”