On 9 July 2024, global experts explored how to address corruption through an integrated mindset and collaborative approach during an IFAC (International Federation of Accountants), ICAEW (the Institute of Chartered Accountants in England and Wales), and Basel Institute on Governance joint webinar, organized in collaboration with the OECD and Business at OECD (BIAC) as part of the Brazilian B20 Integrity & Compliance Task Force advocacy program and the  25th Anniversary of the OECD Anti-Bribery Convention campaign. The event brought together over 600 live participants from over 150 jurisdictions.

Scott Hanson at Integrated Mindset in Practice Anticorruption event

Watch the full event  https://www.youtube.com/watch?v=MPjIrKD-S_o

After a welcome note by Scott Hanson, Director at IFAC,  Gareth Brett, Interim Director, Trust and Ethics at ICAEW, presented key highlights of the new IFAC, ICAEW, and the Basel Institute on Governance joint report Integrated Mindset in Practice: Professional Accountants in Business and Anti-Corruption Compliance that was launched at the event.

Gareth Brett emphasized: “Our risks are constantly evolving. What we face today will not necessarily be our challenges tomorrow. Take Generative AI, for example. We are still grappling with its implications for society and how it might enable new forms of criminality and corruption. In light of this, I believe it is crucial to know where your risks lie; then identify your red flags and finally, continuously update your risk assessments.”

“By staying alert and adaptable, we can better prepare for future challenges in this rapidly changing landscape”, he noted.

Gareth at the Integrated Mindset event

The panel discussion moderated by Laura Takamizawa, Principal at IFAC, explored the key role that professional accountants in business, working collaboratively with internal and external stakeholders, can play to help to combat corruption, including:

  • Internally, how the CFO and finance function can work cross-functionally to support an integrated mindset approach to anti-corruption compliance and help to instill an ethical culture of integrity and governance. 
  • Externally, the importance of championing collective action and exploring opportunities to collaborate with other stakeholders within their jurisdictions and sectors.
    Laura at Integrated Mindset event

Fostering an Integrated Mindset through Internal Collaboration and a “Whole of Business” Approach

For Nicola Allocca, Risk, Business Integrity, Resilience and Quality Director at Autostrade per l’Italia, Chair of the BIAC Anti-Corruption Committee and Co-Chair of the B20 Integrity & Compliance Task Force, businesses need a long-term vision that considers both planetary challenges and opportunities. “Corruption is a significant challenge, but zero corruption presents a substantial opportunity. An urgent action plan is necessary to strengthen the real economy in a volatile world,” he said.

“Autostrade per l’Italia’s anti-corruption program, ‘Next to Legality’, includes specific solutions with strong involvement from the finance function, such as a sound enterprise risk management model; climate risk assessment & ESG, transition plan risk assessment; antifraud systems; as well as continuous monitoring using AI for real-time insights and improved decision-making,” Nicola Allocca explained. 

“Corporations should integrate compliance footprints into their industrial plans, setting compliance KPIs on par with performance KPIs and linking them to management MBOs (Management by Objectives),” he added.

Sharon Ditchburn, Managing Director of Capital Advantage and the Vice Chair of IFAC’s Professional Accountants in Business Advisory Group, noted that “In practice, CFOs with integrated mindsets can deliver incredibly powerful insights on how the full value chain can be exploited and where leakage and illegal practices can occur.”

She said she witnessed increased collaboration between compliance and finance teams to fight corruption through understanding risks and gaps and enhancing the control framework around these. 

“This is our ‘design by default’ approach,” Sharon Ditchburn explained, stressing however that “We need to respect the delineation between finance as first line and compliance as second line in the controls structure. Compliance must still retain a degree of independence, including for investigation and reporting.”

Scarlet Wannenwetsch, Senior Collective Action Specialist at the Basel Institute on Governance noted that “While traditionally anti-corruption issues were tackled on the compliance/legal side, we've seen over the past years interest and need from companies to transition more into a ‘whole of business’ approach.”

“But we also see the struggle and lack of clarity on how to achieve this in many sectors”, she added, highlighting the example of the intersectionality between corruption and human rights, where focus is on areas of clear convergence such as due diligence, where there's a real benefit for all the different sides of the house involved.  She also referred to “interesting learning opportunities from small and medium-sized enterprises (SMEs), particularly medium-sized companies, which, often by necessity, have a more integrated approach.”

Panel at Integrated Mindset event

The Need for Multistakeholder Collaboration and Collective Action

Collaboration –- not just within organizations, but also between organizations and across society – was another key theme of the discussion.

For France Chain, Senior Legal Analyst in the Anti-Corruption Division of the OECD, “The OECD Anti-Bribery Convention -- and more importantly its implementation still today 25 years after it first came into force -- are designed to support a comprehensive ‘whole of business’ or ‘whole of society’ approach to combating bribery. Having governments, civil society, and private sector altogether playing a key role in preventing bribery is essential.”

 “Collective action under the recommendations encompass strengthening partnerships between government, civil society, private sector -- including professional associations such as Professional Accountancy Organizations -- to ensure that there are cohesive and coordinated efforts,” France Chain continued.

“We need both the company internal integration through value-based compliance to move towards the ‘whole of a business’ approach, but also external consolidation, harmonization that is collaboratively implemented through collective action. In the best-case scenario, we really can't afford to stand still,” said Scarlet Wannenwetsch. 

“And we can drive positive action through collective activities and groups at international, country, sector and professional levels,” added Sharon Ditchburn.

Multistakeholder collaboration is also a key feature of BIAC’s Zero Corruption campaign, which  calls for the treatment of zero corruption as an 18th SDG and puts forward 10 key actions to build a more resilient, sustainable, responsible and collaborative a collaborative and corruption resistant global economy. 

Speaking to the role of collaboration in the Zero Corruption campaign, Nicola Allocca underlined: “These actions are clustered in three main groups: first, changing the way we think about corruption and break biases that corruption cannot be eliminated; second, creating meaningful tools and taking impactful measures; and third, acting together globally. Governments, civil society, businesses, international organizations must come together as equal partners to translate the global commitments into tangible results and level the playing field.” 

The Role of the Finance Function and Accountants in Connecting the Dots

The new joint report provides professional accountants with insights on how to embed anti-corruption measures into the broader framework of environmental, social, and governance (ESG), ensuring that integrity and transparency remain at the forefront of business practices.

For Sharon Ditchburn, from an accounting perspective, reducing corruption is no longer just a matter of “cost” which impacts economic performance: “That loss is now seen as lost opportunity to fund ESG pursuits or prevent diversion to less valuable activities. Corruption is also a governance risk which has serious credibility and reputational costs to boards and governing bodies, with a long-term effect on funding risk, business partner quality and regulatory penalties.” 

IFAC’s 2023 report on “Understanding Anti-Corruption Reporting” notes that 95% of companies surveyed globally disclosed some anti-corruption information, although only 29% received assurance on this disclosure. “As we move further into assurance for sustainability and non-financial reporting, there will be further discoveries of methods to detect and prevent corruption,” Sharon Ditchburn explained.   

For Scarlet Wannenwetsch, professional accountants and finance functions are well positioned to identify the commercial and business benefits of addressing corruption risks and corruption-related risks, such as the cost of due diligence in high-risk markets. “Being closer to the core business, accountants bring another important perspective to the risks that can be addressed from the financial side into what has been until now more compliance-focused discussions. This is key for collective action. The other interesting potential for professional accountants is looking at new topics that maybe are not prioritized as much in the current compliance focused initiatives,” she said. 

Reflecting on the OECD Anti-Bribery Recommendation, and its specific provisions for accounting, external audit and internal controls, France Chain explained: “From an OECD perspective, we see three roles for the accountants in terms of prevention and detection of transnational corruption and bribery and other types of fraud: financial integrity and accuracy, including detecting and reporting discrepancies that could indicate bribery and corruption; implementing strong internal controls; and compliance with laws and regulations.”

The panel also discussed the vital role played by professional accountancy organizations (PAOs) in terms of education and training. Keeping their members up to date with latest developments, including technological developments and AI, and providing training programs on ethics and compliance, is crucial. “Beyond your own profession, it’s also about educating clients and businesses on the risks and consequences of bribery and offering training sessions,” France Chain noted.

Watch the key recommendations from our speakers https://www.youtube.com/watch?v=di728UBNiwo

USEFUL RESOURCES

IFAC, ICAEW, Basel Institute on Governance

IFAC

ICAEW

Basel Institute on Governance

OECD

Business at OECD

 

 

 

Laura Takamizawa
Laura Takamizawa

Principal, IFAC

Laura Takamizawa is a Principal in IFAC's thought leadership team, focusing on initiatives in support of finance and accounting professionals working in business and the public sector. She was previously an Audit Manager at Grant Thornton, specializing in public sector audit in the UK, and prior to that worked for the Audit Commission. She also spent a year on secondment to the International Integrated Reporting Council (IIRC), where she was responsible for managing their public sector and business network programs.

Laura is a member of the Chartered Institute of Public Finance and Accountancy (CIPFA), and holds a Bachelor of Science (Hons) degree in Mathematical Physics from the University of Nottingham (UK).

Cecile Bonino
Cecile Bonino

Principal, Global Engagement

Cecile Bonino is Principal of Global Engagement for IFAC. She bridges global organizations' relationship management, policy support, event management, and brand awareness. A lawyer by education, Cecile has 20 years of experience in public affairs and public relations. Before joining IFAC, Cecile worked for 13 years at ACCA, where she headed EU Affairs and the ACCA Brussels office, working with European decision and policymakers, Media and key influencers, as well as global organizations. Prior to this, Cécile worked as a consultant in financial services, energy, environment, and climate change at Weber Shandwick and as Environment and Legal Affairs adviser at the European Landowners Organisation. At the beginning of her career, Cécile also worked at the DG TRADE of the European Commission, the DG Development of the College of Europe, and the law firm, Gide Loyrette Nouel. In 2012, Cécile won the ‘Public Affairs Professional of the Year’ prize at the European Public Affairs Awards.

Scott Hanson

Director, Policy & Global Engagement

As Director, Policy & Global Engagement, Scott Hanson is responsible for coordinating IFAC’s engagement strategy with global organizations and non-accountancy stakeholders.  Mr. Hanson also leads IFAC’s policy and advocacy related to anti-corruption, anti-money laundering and economic crime, and oversees IFAC’s engagement in donor-funded capacity building initiatives.

Mr. Hanson began his career in markets supervision roles at NYSE Regulation and FINRA (the Financial Industry Regulatory Authority) in New York, before transitioning into international regulatory policy at FINRA in Washington, DC. 

Mr. Hanson then worked in regulatory policy within the European System of Financial Supervision at the Central Bank of Ireland (Dublin), touching on diverse policy areas across the Bank and leading the establishment of the Central Bank of Ireland’s Innovation Hub.

Mr. Hanson holds a B.A. from the University of Chicago, a J.D. from Brooklyn Law School, and has been to over 90 countries.