By: Karen E. Gray | The FCPA Blog – The FCPA Blog | Thursday, May 4, 2017 at 8:28AM
The award-winning films “Spotlight” and “All the President’s Men” both chronicled investigative journalism that uncovered huge scandals. But in re-watching those movies, I’ve noticed something else they have in common — journalists who kept following the bread crumbs.
Gathering background information was just one part of the process. The Boston Globe’s Spotlight team and the Washington Post’s Woodward and Bernstein then stayed on the trails despite some misdirection and dead-ends, to finally uncover the bigger picture.
Both movies therefore presented a powerful case for compliance professionals when it comes to mitigating risk. Due diligence alone is not enough. You also need to conduct on-going risk monitoring to spot potential signs of risk sooner.
Ironically, it was the Watergate reporting and subsequent political fall-out that initiated the United States’ tough stance on bribery and corruption. By 1977, Congress had passed the Foreign Corrupt Practices Act, making the U.S. the first country to ban companies from bribing foreign government officials. Since then, many other nations have joined in the effort, and additional anti-bribery and corruption laws are expected.
Moreover, if 2016 is any indication, enforcement agencies are expanding cross-border coordination on bribery and corruption investigations. The TRACE International 2016 Global Enforcement Report found a significant year-over-year increase in the number of U.S. and non-U.S. enforcement actions related to bribery of foreign officials. It’s a trend that is not lost on corporate leaders.
According to the 2017 Top Risks Report produced by the Enterprise Risk Management Initiative at NC State University, 66 percent of corporate board and C-suite members surveyed placed regulatory change and heightened regulatory scrutiny in the top five significant risks they face this year.
Establishing a PESTLE-based approach to risk monitoring can help companies overcome data overload. PESTLE is a handy memory aid that stands for six categories of risk.
- Political
- Economic
- Socio-Cultural
- Technological
- Legal
- Environmental
Monitoring sanctions, watch lists and PEPs alone isn’t enough. With PESTLE-based risk monitoring, companies are better positioned to address emerging risks.
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