Last week we covered setting the foundation for a better gifts and entertainment compliance program. If you missed it, you can read Part 1 here. In the second piece of The Case for a Better Gifts & Entertainment Compliance Program, we’ll look at the key components to having an effective program.
Building the Framework for Gifts and Entertainment Compliance
Before you even begin looking at tools or systems to help you take in and monitor disclosures of gifts, travel and entertainment, it’s important to understand the critical components of effective G&E management. This will help you more clearly set expectations and define success for your team, executives and employees. It will also help you build a minimum and optimal set of requirements for any systems or tools you look to implement.
- Change your perspective
- Standardize and streamline
- Know your audience
- Make the rules
Outbound and Inbound Disclosures
Next, define the information you want and need to track for gifts, travel and entertainment your employees are giving to someone else. Your policies and procedures should help employees understand that this is a proactive responsibility aimed at ensuring that any gifts, travel and entertainment they’re conferring to an outside party receives the appropriate and necessary scrutiny and approval. Local and international bribery standards and recent enforcement trends can help guide this exercise—any information regulators may ask for is data you should have readily available and easily accessible in your G&E system.
Beyond ensuring that employees understand what types of gifts—if any—they’re legally allowed to accept, it’s also important they know how and what type of information you need to decide if they can accept the gift (or what to do with it if they cannot). This will more often than not be a reactive exercise, but an important one nonetheless.
What you’ll need to track:
- Type of disclosure
A Tool With a View
Beyond individual G&E disclosures, you should also expect to have a more comprehensive understanding of your organizational “ecosystem” with regard to gifts being given and received in the form of G&E dashboards. These dashboards can come in the following forms, depending on the granularity of insight needed:
- Individual – See all of the gifts an employee has offered, given, been offered or received in one place.
- Group – Key for business units or regional offices that pose a higher risk of bribery and corruption, viewing an aggregate collection of outbound and inbound gifts helps you make important connections, establish internal benchmarks and spot trends that may elevate your risk.
- Company – Useful for understanding macro trends with what, how, why and to whom gifts are coming in and going out of your organization, the company view can help you establish G&E program benchmarks and deliver a compliance program report to your board, regulators or other third parties with richer detail and greater transparency.
The Value of Integration
Having a single, configurable and powerful system of record for inbound and outbound disclosures of gifts can help safeguard an organization from unwanted regulatory scrutiny and enforcement action. However, to maximize the efficacy of your G&E program, however, consider integrating it with other systems—both inside and outside of the compliance department—to add a richness and context to your G&E data that will yield more granular and actionable insights.
Mitigating Risk with Reporting and Analytics
Though challenging, properly collecting and managing G&E disclosures presents a key opportunity for organizations to reduce compliance risk by having more and better disclosure data to analyze—and act on—around the gifts employees are giving and receiving that may pose a problem.
- Hindsight: Enhance Reporting Capabilities – More disclosures, with richer and more structured data contained in them, equips the corporate compliance team with richer insight into employee behaviors, bribery risk disposition and drivers and where G&E initiatives may be working or falling short. However, the true value of a single system of record lies beyond short-term G&E clearance and triage: The data you collect over time will provide you with insight you need to continuously enhance and defend your G&E compliance efforts.
- Predictive: Enhanced Analytics Capabilities – What’s more, you’ll be able to leverage the wealth of data at your disposal to build predictive models—allowing you to move from a proactive to reactive strategy by anticipating upticks in risk exposure based on historical trends and events.
As the stakes continue to increase worldwide for anti-corruption compliance, organizations should prioritize building a world-class approach to taking in, monitoring and analyzing disclosures of gifts, travel and entertainment given and received on their organization’s behalf. Doing so helps employees understand and fulfill their responsibilities, allows your compliance team to more effectively monitor and audit G&E transactions and provides senior management and government officials with the records they need to be assured of your good- faith effort to avoid corruption.
If you are interested in learning more on gifts and entertainment compliance, access our 2-part eBook here!