In the corporate world, some crimes such as Ponzi schemes may expose themselves over time. Others, such as bribery, can stay hidden for several years. That’s why people in high places, as well as the general public, may just accept corporate bribery as a dark practice that almost no one can get rid of. But is this true?
Tackling Corporate Bribery
It’s true that a tight-lipped, tight-knit group of corporate fraudsters are hard to expose. But there are two things to keep in mind here: 1) Criminal activities usually have weak points that can be exploited, 2) A strong corporate culture makes it difficult for criminals to sustain illicit activities.
Let’s explore both concepts briefly.
Corporate Bribery Has Weak Links
A study by two Harvard Business School professors revealed a flaw in corporate bribery schemes. They noted that bribery can bring in contracts to grow a company’s revenue, but they fail to bring in profits. To sustain a bribery scheme, it often requires other bribes which are costly and eat into the gains generated by the initial bribe. As the cliche goes, companies who engage in bribes tend to take one step forward but then one step back.
Also, bribery often leads to alterations in standard business practices, not to mention in the way certain product orders or contracts are handled. This means that there is a strong likelihood that certain red flags can emerge, and if detected by the right tools (more on this later), will reveal evidence of a bribe at play.
Detecting Bribery
Trying to sniff out the scent of bribery is a bit tricky because it appears in very subtle forms. The irony behind it all is that those who engage in bribery do so in an overt way, exploiting the unawareness of their colleagues. With that said, there are numerous signs that someone or a group of people are accepting bribes.
The Symptoms Of Bribery
- Bypassing standard procedures
- Unusual cash payments
- Unusually high commission percentages paid to particular clients
- Awarding contracts that violate company ethics or codes
- Payments made ahead of schedule or pressure to make certain payments ahead of time for certain clients
- Private meetings being made with contractors and clients in hopes of securing contracts
- Keeping certain departments in the dark about client meetings or contracts
There are quite a few signs of corporate bribery to look out for, some of which will be more apparent than others.
For issues involving private meetings and seclusion, there needs to be an active inquest into what’s taking place. This is very difficult to carry out when the people involved are C-level executives, managers and other high-ranking individuals in an organization.
However, you can detect other signs such as unusual payment schedules or unwarranted commissions to clients with the help of a data analytics tool. For example, you can use our GLAnalytics solution to spot deviations in a client/vendor payment schedule. Such an anomaly could be a sign of a bribe at work – perhaps an earlier cash advance to secure additional business from a client.
Now keep in mind that a data analytics tool can’t tell you directly whether a corporate bribe has been accepted. What it does is find patterns that may be consistent with bribes and corruption. You’ll need to combine other surveillance and compliance strategies to truly uncover what may be happening under the table.
Live By the Bribe, Die By the Bribe
Individuals and teams alike who accept corporate bribes are inevitably setting themselves up for failure. As mentioned earlier, accepting one bribe means accepting more, and that cancels out any potential profits that the first bribe would bring. It’s really a self-defeating practice that only brings temporary perks for those involved.
With that said, you can detect signs of bribery within an organization since they usually involve a deviance in standard practice. In cases involving payments, a data analytics tool can find unusual patterns that would raise red flags of bribery.
When combined with other investigative practices, you may very well identify the participants of an illicit scheme in your organization.
