U.S. executives know that most Foreign Corrupt Practices Act compliance risks come from third parties -- overseas acquisition targets, joint venture partners, agents and others. Despite that knowledge, about three quarters of them think their company's due diligence of intermediaries isn't working. That's according to KPMG's 2008 Anti-Bribery and Anti-Corruption Survey.
Here are some findings from the survey based on responses from 103 executives at U.S. multinational companies:
- 82 percent of the respondents said they face difficulties performing effective due diligence on foreign agents and other third parties.
- 76 percent said they cannot adequately audit third parties for compliance.
- 73 percent said their mergers and acquisition due diligence is sub par.
- 27 percent said their level of M&A due diligence is minimal.
Recent cases involving individuals illustrate how FCPA offenses can harm anyone caught in the mess. That's why, even in tough times, U.S. executives should demand the protection of an effective compliance program. They shouldn't accept compliance risks from third parties that can damage or destroy their companies, their careers, and their families.