Compliance Policies and Procedures for small Business

50 %
50 %
Information about Compliance Policies and Procedures for small Business
Business & Mgmt

Published on February 19, 2014

Author: b2b-compliance



As a result of new anti-bribery laws (i.e. UK Bribery Act), multinational companies are under increased pressure to carefully select their Business Partners in critical countries. The standard procedure is a "Compliance Due Diligence" that combines a questionnaire process, background checks and the data evaluation. Small businesses must prepare for these check and implement at least a basic Compliance framework in order to qualify for multinational business partners. The framework must include most relevant Compliance policies and procedures as well as Compliance training.

Why small business needs a basic Compliance Framework Applying compliance questionnaires for selecting Business Partners © 2013 1

Your benefits from this presentation  Understand the Business Partner Compliance Due Diligence  procedures that are applied by more and more multinational companies for selecting their third party providers How can small business set up a basic Compliance framework and remain competitive in international business © 2013 2

Due Diligence within the Business Partner selection process is key to demonstrate effective compliance procedures • • • Multinational companies are under increased pressure to demonstrate adequate procedures for the proper selection, management and monitoring of their Business Partners. Failure to do so can result in civil and criminal liability (e.g. under the United Kingdom Bribery Act of 2010) and can lead to severe reputational damages. Implemented measures must be proportionate to the risk environment a company faces. The higher the risks related to an industry, country or go-to-market strategy are, the stricter must be the Due Diligence procedures applied. © 2013 3

What does Due Diligence in the context of the Business Partner selection process exactly mean? • • • • • To apply a questionnaire procedure to obtain relevant stakeholder and company information directly from the source. To let the Business Partner certify that he will comply with all legal requirements and desired business conduct standards. To obtain information on the Business Partner from an independent source. To conduct a screening of company stakeholders and legal entities against most relevant international sanction-, PEP and terror-lists. To be able to recognize and analyze “Red Flags”. © 2013 4

Why is a Compliance questionnaire so important? 1. 2. 3. To obtain all relevant master data from a potential Business Partner. According to our experience it is extremely difficult to get reliable information from service providers when it comes to smaller entities and certain regions/countries. To document that you have clearly communicated the rules and expectations on compliant business conduct to your potential Partner. A web-based questionnaire is a great instrument to let the Business Partner certify that he will meet all legal requirements in the course of the services he intends to render for you. © 2013 5

What is a Compliance questionnaire and what should it be used for? • • • A Compliance questionnaire must be used for critical Business Partners before a contractual obligation is made. Critical Business Partners are “associated parties” under the definition of the UK Bribery Act, section 7. In general, these parties are able to influence the decisions of third parties in the interest of the principal (e.g. sales intermediaries). The questionnaire must be designed to (1) obtain all relevant master data on the company and its stakeholders, (2) detect typical Red Flags (indicators for potential Compliance violations), (3) instruct the Business Partner on the expectations in terms of compliant business conduct and (4) obtain a compliance certification. © 2013 6

Example: Business Partner Questionnaire content Key data 1. Legal name of company 2. Address of legal registration 3. Invoicing address 4. Foundation date 5. Name(s) of legal representative(s) 6. Name(s) of shareholder(s) 7. VAT / company registration number 8. IBAN used for bank transactions with principal 9. References 10. …. © 2013 7

Example: Business Partner Questionnaire content Compliance questions 1. 2. 3. 4. 5. 6. 7. 8. Stakeholders: PEP / public official involvement Acceptance of principal’s code of conduct and/or other principles Does Business Partner provide regular Compliance trainings? Does Business Partner have a Code of Conduct and/or an Anti-BriberyPolicy? Does Business Partner have a whistleblowing procedure? Does any stakeholder have a conflict of interest when being engaged for principal’s business? Will core services be outsourced to third parties? … © 2013 8

Data evaluation 1. The completed questionnaire must be checked by knowledgeable staff who is able to recognize and analyze “Red Flags”. • Example for a “Red Flag”: Country of company registration, territory of service and country of bank account do not match 2. Additional information from the internal Business Manager who is in charge for the Business Partner selection should be obtained. • Example: compensation structure, nature of service 3. Additional background checks (via internet, open source or service providers) and a sanction list screening must be conducted. 4. The system should automatically calculate a risk score based on the information provided. © 2013 9

Resume • • Compliance questionnaires have become a wide spread tool to assess compliance and ethics of potential Business Partners To implement an effective procedure (that goes beyond windowdressing) organizations should consider the following watch-outs: • • • • Effective implementation begins with the right questions, based on a riskassessment (e.g. you need other questions, if you have no FCPA exposure etc.) Effective implementation needs proper system support: do not even consider managing the volume of information via Excel (!) by sending files back and forth Effective implementation requires training. Employees involved in the process must be able to recognize red flags among the information provided Effective implementation requires skills and resources to scrutinize and manage critical cases once red flags have been identified (exception and approval flows) © 2013 10

Implications for small businesses • • • • Be prepared to answer Compliance questionnaires from multinational companies Multinational companies will not engage into business with partners showing “Red Flags” (e.g. matches in watch lists, public officials as stakeholders, in- transparent company structures, trustees as legal representatives etc. ) The best way to pass Compliance checks is your reputation and a history of compliant and ethical business conduct Make sure, you have implemented - at least – a basic Compliance framework (Code of Conduct and other policies, Compliance Training to employees etc.) © 2013 11

Thank you is the web resource center for Compliance training material and policies Ready-to-go solutions include for example • Code of Conduct templates • Anti-Bribery Policies • Anti-Trust Training • Conflict of Interest Training • Proper Behavior at the Workplace Training © 2013 12

Add a comment

Related presentations

Canvas Prints at Affordable Prices make you smile.Visit http://www.shopcanvasprint...

30 Días en Bici en Gijón organiza un recorrido por los comercios históricos de la ...

Con el fin de conocer mejor el rol que juega internet en el proceso de compra en E...

With three established projects across the country and seven more in the pipeline,...

Retailing is not a rocket science, neither it's walk-in-the-park. In this presenta...

What is research??

What is research??

April 2, 2014

Explanatory definitions of research in depth...

Related pages

Small Business Policies and Procedures - ADA Compliance ...

Policies and Procedures. Businesses must review their policies and procedures for serving customers and change those that exclude or limit participation by ...
Read more

HR Basics for Small Business - ReallyEasyHR

HR Basics for Small Business was ... But with regard to compliance with HR ... The employee handbook explains your company's policies and procedures, ...
Read more

Policy & Regulations | The U.S. Small Business ...

Policy & Regulations. SBA Performance; ... Get information about SBA's Standard Operating Procedures, ... U.S. Small Business Administration, ...
Read more

Department of Transportation Policies and Procedures For ...

Department of Transportation Policies and Procedures ... procedures and policies to promote compliance with the ... Small Business Paperwork Relief ...
Read more

How do I Develop a Policy & Procedures Manual? |

How do I Develop a Policy & Procedures ... Commission small business liaison for additional help with EEO compliance. Attendance policies and any ...
Read more

Compliance Concerns for Small Business | HR Whitepapers

Top 5 HR Compliance Concerns for Small Business. ... Multiple HR Policies and Procedures to ... and compliance. Whichever option a small business ...
Read more

Small Business Program Policy for Federal Contracts

Small Business Program Policy for Federal Contracts . ... (Public Law 95-507) which states that small business ... Prepare procedures that govern Plan ...
Read more

12 Step HIPAA Compliance Checklist for Small Businesses ...

As such, take note of the following 12 step HIPAA compliance small business checklist from the healthcare experts at Flat Iron Technologies, LLC:
Read more

Business processes, procedures and standards | Queensland

Business processes, procedures and standards are ... and policies for your business, ... or compliance changes that affect your business).
Read more

Polyproc accounting policies

... policies and procedures for your business ... Compliance Toolkit now available. POLYPROC™ specializes in providing accounting policies and procedures ...
Read more