AlixPartners survey shows significant gaps in companies’ response to corruption risk, leaving ample room to improve

Survey respondents cited lack of skilled personnel, budgetary concerns, technology, and C-suite and board prioritization as top reasons for inaction.

NEW YORK (September 30, 2021) – AlixPartners, the global consulting firm, today released its annual Global Anticorruption Survey which focuses on the challenges faced by global businesses when managing corruption risks.

Corruption is pervasive globally. In fact, 80% of respondents in our survey indicated that their industry is regularly exposed to corrupt practices. Particularly noteworthy was the number who indicated their organizations were not aggressively responding to corruption concerns. Respondents identified several gaps in their organizations:   

• 25% of responding companies did not have dedicated anticorruption programs or written policies.
• 23% never had conducted an anticorruption/antibribery risk assessment or compliance benchmarking review.
• Only 7% were ‘extremely confident’ in their company’s overall anticorruption program.
• 36% either were ‘not very’ or ‘not at all’ confident in their company’s anticorruption due diligence processes.

When asked to identify the challenges impacting their organization’s ability to address corruption risk, the most frequently cited were: 

• Lack of financial resources: 85%
• Lack of sufficient IT systems or monitoring software: 79%
• Inadequate staffing resources: 74%
• Lack of involvement from the senior management and board of directors: 71%

“The most important consideration to combating corruption is having a vigilant mindset at every level across the company. However, it is noteworthy that our survey highlights the disconnect between the recognition that exposure to corrupt practices remains very high, yet respondents acknowledge that their policies and programs are inadequate. Further exacerbating the problem, a majority of respondents (60%) think corruption risk will increase in a hybrid work model,” said Sean Dowd, Managing Director at AlixPartners. “Developing proactive and regular training and establishing accountability among employees and third-parties are effective in creating a culture of compliance. Mitigate risk now to save money, time, and reputational damage later.”

The good and the evil of data

Data is a double-edged sword when it comes to fighting corruption. On one hand, its volume, availability, collection, and analysis can be hugely helpful in identifying and pursuing corrupt practices and their perpetrators. But on the other, issues, such as privacy concerns, present challenges to companies seeking to investigate possible wrongdoing. One-half of survey respondents cited data privacy as something that keeps them up at night. Data privacy concerns are exacerbated by the exponential growth of data that companies must manage in order to maintain anticorruption programs. In cross-border investigations, data collection presents particular challenges, with the biggest issues cited as: 

• Maintaining data security – 69%
• Lack of integration between data sets and IT systems – 73%
• Local laws – which can be particularly strict about data privacy - 88%

The arms race for compliance talent

Compliance professionals are in demand, but the supply is a challenge. Factors driving this demand include:

• Risks from the profusion of special purpose acquisition companies (SPACs)
• Increased M&A
• Rapid growth in risks related to cryptocurrencies
• Pressure on technology companies and other start-ups to comply with new and existing regulation
• The realization by many companies that their compliance staffing is too low and they need to catch up.

About 75% of respondents, for instance, said that inadequate staffing was a challenge to their company’s ability to address corruption risk. Almost half cited insufficient staff expertise as a limitation on their company’s ability to conduct antibribery/anticorruption due diligence.

About the 2021 AlixPartners Global Anticorruption Survey

The AlixPartners Global Anticorruption Survey polled more than 300 compliance and risk management professionals as well as corporate counsel and other professionals in legal, accounting/finance, and purchasing/procurement professionals representing more than 20 major industries worldwide.  For more information about the survey, please click here.

About AlixPartners 

AlixPartners is a results-driven global consulting firm that specializes in helping businesses successfully address their most complex and critical challenges. Our clients include companies, corporate boards, law firms, investment banks, private equity firms, and others. Founded in 1981, AlixPartners is headquartered in New York and has offices in more than 20 cities around the world. For more information, visit www.alixpartners.com.