FCPAméricas Blog
Going Beyond the TI Index: New tools for assessing integrity risks
12.01.2011
Enforcement officials and “best practice” descriptions stress that adequate anti-corruption compliance programs are based in sound corruption risk assessments. Howard Sklar recently provided an in-depth look at how risk assessments can be used for maximum effect. The question remains, however: how should compliance officers assess the integrity risks presented by particular countries or industries?
Historically, companies have looked to their own experience and, frequently, to Transparency International’s Corruption Perceptions Index (the TI Index) to help identify country risk. The 2011 version of the TI Index was just launched today.
These are good first steps, but leave much to be desired. Fortunately, compliance officers have a growing number of metrics to consider when conducting such risk assessments.
The Mintz Group’s “Where the Bribes Are” Map
The James Mintz Group recently launched an online tool, the “Where the Bribes Are” Map, that measures the amount of FCPA enforcement actions in each country. One advantage of this tool is that the information is presented visually. As noted by Jim Mintz, President of The Mintz Group, “[we]have put out a ‘wall poster’ version of the map for a couple years now, and some general counsel told us it’s helped convey the risks of paying bribes, and the gravity of the FCPA crackdown, to their corporate officers and directors.”
Moreover, the map also helps to show where enforcement is looking. Enforcement officials have said that they conduct sweeps by sector, industry and region. Accordingly, it makes sense to focus compliance efforts where the most enforcement is going on. Is Argentina the darkest red in the Americas? Maybe your company should be sure that it is protected there.
In addition, The World Bank’s Worldwide Governance Indicators project measures corruption in a similar manner to Transparency International by combining the views of numerous enterprise, citizen, and expert survey respondents in industrial and developing countries. This provides yet another set of data to help companies navigate country risk.
Assessing the Metrics
No corruption measure is perfect. FCPAméricas made this point in its first ever blog post. Compliance officers should know the strengths and weaknesses of indicators.
Next week, guest blogger Juanita Riaño, the former Manager of the program “Global Tools to Measure Corruption” in Transparency International-Secretariat, who has also worked for the World Bank Institute on anti-corruption and governance diagnostics, will review the TI Index, the Mintz Group’s “Where the Bribes Are” map, and the World Bank’s Worldwide Governance Indicators, and describe how they can be used appropriately (and inappropriately).
The FCPAméricas blog is not intended to provide legal advice to its readers. The blog entries and posts include only the thoughts, ideas, and impressions of its authors and contributors, and should be considered general information only about the Americas, anti-corruption laws including the U.S. Foreign Corrupt Practices Act, issues related to anti-corruption compliance, and any other matters addressed. Nothing in this publication should be interpreted to constitute legal advice or services of any kind. Furthermore, information found on this blog should not be used as the basis for decisions or actions that may affect your business; instead, companies and businesspeople should seek legal counsel from qualified lawyers regarding anti-corruption laws or any other legal issue. The Editor and the contributors to this blog shall not be responsible for any losses incurred by a reader or a company as a result of information provided in this publication. For more information, please contact Info@MattesonEllisLaw.com.
The author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author.
© 2011 Matteson Ellis Law, PLLC
Post authored by Matteson Ellis, FCPAméricas Founder & Editor
Comments
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July 6th, 2012 at 2:18 pm
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