Reinforcing your values today

Steps for mitigating corruption risk

The New Zealand Government is proceeding with significant COVID-19 economic relief packages, with the ~$12 billion of capital infrastructure project spending announced in early 2020 to be fast-tracked to stimulate the post lockdown COVID-19 economy. Surge funding for other initiatives are underway (most notably the Wage Subsidy Scheme), with further schemes likely in the coming weeks.

The economic pressure that has arisen as a result of COVID-19 heightens the corruption risk that organisations face, and is further exacerbated by organisations changing, fast-tracking or implementing new procurement or fund distribution processes.

This risk is evidenced by the following key findings from our recent 2020 Deloitte Bribery and Corruption Survey, including that:

  • Around 60% of survey respondents told us that they are ‘not confident’ or only ‘slightly confident’ with the due diligence checks their organisation performs on sub-contractors, third parties or agents.
  • Respondents considered undisclosed conflicts of interest to be the biggest bribery and corruption risk faced by their organisation.
  • Almost a third of respondents believed that leadership example was the most effective way to build the capabilities of employees to manage bribery and corruption risk, yet 11% told us that their organisation’s position on bribery and corruption is not conveyed.

What can you do now?

Organisations must have the mechanisms in place to provide stakeholders with confidence that relief funding and response spend is protected by robust governance.

Some immediate straight forward and practical steps to take now are:

1. Take a risk-based approach to due diligence and procurement
Governance activity must be planned and incorporated into organisations’ processes at the design stage of procurement and fund distribution programmes.

2. Assess your approach to managing conflicts of interest
Too many organisations still rely on self-disclosure. The need to proactively detect conflicts of interest is paramount. Utilising technology, multiple attestation points and robust conflict management post-disclosure will protect your people and organisation.

3. Reinforce tone at the top
Time must be taken to ensure that the ethical expectations of your organisation are understood during a time of crisis. Particularly when there is reduced visibility and interaction, messaging from senior leadership is a simple and effective way to lift awareness levels and understanding of your organisation’s position on corruption. This is important for your people, suppliers and stakeholders.

“Organisations must be clear on how their values apply to the decisions being made today. This is a critical time and the long-term sustainability of businesses will be determined by choices being made right now”

Lorinda Kelly
Deloitte Forensic

The Deloitte Australia and New Zealand Bribery and Corruption Report 2020
Navigating with confidence

Explore the report

The content of this article is accurate as at 13 May 2020, the time of publication. This article does not constitute advice; if you wish to understand the potential implications of current events for your business or organisation, please get in touch.

Alternatively, our COVID-19 webpages provide information about our services and provide contacts for relevant experts who can help you navigate this quickly evolving situation.

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