AlixPartners announces 2020 Global Anticorruption Survey

Survey respondents express lack of confidence in anticorruption programs and due diligence processes; one-third of respondents say aspects of remote working will increase corruption risk.

NEW YORK (September 22, 2020) – AlixPartners today released its annual Global Anticorruption Survey which focuses on the challenges faced by global businesses when managing corruption risks. The survey polled more than 300 corporate counsel, legal, compliance, accounting/finance, and purchasing/procurement professionals representing more than 20 major industries in North America, Latin America and Europe.

Survey highlights:

• 84% of respondents say their industries are exposed to corruption risk, with almost 40% of those saying they view the risk as significant.
• Only 65% of respondents are confident in their company’s overall anticorruption program, a 15% decrease year-over-year and 1 in 4 respondents are not confident in their company’s due diligence processes, representing a 250% increase year-over-year.
• 1 in 10 respondents view their company resources as insufficient to identify and respond to corruption risks, a 70% increase year-over-year.
• However, nearly 40% of respondents’ companies have reduced budget and/or headcount for compliance programs in light of Covid-19.
• One-third cite conducting interviews or investigations remotely, employees working remotely, and technology limitations as most likely to increase corruption risk.

“The incredible disruption caused by Covid-19 has impacted businesses and people globally, and our survey shows that compliance and anticorruption programs are not immune to the unprecedented disruptive forces of the pandemic. Although respondents were divided on whether corruption risk will increase in the “new normal”, they agreed that the remote working environment would likely increase corruption risk,” said Sean Dowd, Managing Director at AlixPartners. “One troubling finding from our survey that really stood out was respondents’ lack of confidence in their anticorruption programs while at the same time respondents’ companies have reduced headcount for compliance programs in light of Covid-19. Not surprisingly in the current remote working environment, data privacy remains the #1 issue keeping legal and compliance officers awake at night.”

Implications of decreased travel due to COVID-19 on compliance programs

While the perceived corruption risk attributable to procurement remains high, the perceived risk
associated with sales functions has decreased 30% year-over-year with only 33% of respondents identifying it as subject to the highest level of corruption risk. With travel limiting how the sales function engages with customers, bribes associated with entertainment expenses and meeting in person are less likely.

Survey respondents’ top concerns with transition to the new normal

• 44% - reliance on in-country/in-market compliance and anticorruption function.
• 43% - anticipated need for increased remote working (and view this as increasing corruption risk).
• 42% - corporate need for revenue/income putting additional pressures on compliance and anticorruption functions.
• 41% - quality/competence of workforce (e.g., post layoffs to the extent applicable).

Regional spotlight

Greater China was selected as the region where it’s impossible to do business without corruption with 30% of respondents saying they have avoided doing business there due to the high risk for corruption. This was followed by the Middle East, selected by 18% of respondents. From a regional perspective, corruption risk has significantly increased in the following areas since our 2019 survey.

• India: 69% (+17%)
• Russia: 57% (+27%)
• Middle East: 46% (+30%)
• Brazil: 42% (+28%)
• Mexico: 37% (+29%)
• Africa: 36% (+37%)
• Greater China: 35% (+21%)

Data, analysis & real time monitoring

Organizations continue to use data and enhance systems to access data for monitoring corruption and implementing compliance programs. Three out of four respondents use real time monitoring for suspicious behavior and 89% of respondents think their company is successful in using data to identify corruption. Year-over-year, data privacy remains the #1 issue keeping our respondents awake at night, selected by 55% of respondents.

Top data challenges

• Lack of integration of systems and secure data: over 80% of respondents indicated that this was a challenge to conducting cross-border investigations.
• Moving data across country borders: 40% of respondents expect an increase in challenges associated with moving data across country borders, an increase in 25% YoY.
• Local laws: 28% of respondents believe there are major impediments to collecting and analyzing data due to the local laws, an increase of 133% year-over-year.

About the 2020 AlixPartners Global Anticorruption Survey

The AlixPartners Global Anticorruption Survey polled more than 300 corporate counsel, legal, compliance, accounting/finance, and purchasing/procurement professionals representing more than 20 major industries in North America, Latin America and Europe. For more information about the survey, please click here.