Most CCOs are working with limited information from their due diligence programs or due diligence providers. This means they do not have important data on potential corruption risks to inform their risk assessment matrix.
Based on our 30 years of experience with global due diligence investigations, we’ve identified 5 key areas to prioritize when conducting corporate investigations:
Between 10 to 20% of CEOS and senior executives have adverse information in their backgrounds, which is often hidden or undisclosed. Corrupt executives are often involved in FCPA violations, exposing the corporation to large fines and penalties.
A key takeaway in recent FCPA enforcement actions have highlighted insufficient due diligence investigations. The vast majority of FCPA enforcement actions over the past 10 years have involved some form of inadequate, insufficient or even a total lack of due diligence. Companies that sustained FCPA enforcement actions most usually had ‘check-the-box’ compliance programs.
Starting an investigation with the right basic information including company name sounds simple but is critical in a corporate investigation. Depending on the accuracy of company name(s), an investigation might yield no information about the company or information on an entirely different company, yielding false negatives in a report.