In the current climate of increased prosecutions across the globe for corruption, companies are best advised to put in place comprehensive anti-corruption compliance programmes to deal with business practice going forward.
Corporates, especially those who operate in a 'high risk' business sector or in jurisdictions with a poor corruption reputation, may well feel that an examination of historic business practice too is an appropriate way to manage the risk of exposure to a criminal investigation. By undertaking thorough investigations, companies are sending the right message and setting the correct 'tone at the top'.
If anything untoward is discovered, it can be very alarming for board members to deal with, but following Balfour Beatty's approach and taking the appropriate action early (and this may include approaching prosecutors with the findings of the investigation) is likely to limit reputational damage, send the right message to the markets and calm the nerves of shareholders.
This proactive stance puts the company in control of the investigation, rather than the other way round.
The most important message for business is to know what you are dealing with, and what you are potentially letting yourself in for by making disclosures which will involve your business in the Criminal Justice System.
It is all a question of balance, like any risk management and that balance has of course to be struck in the context of business reality, pressure to hit targets and damage to the business by being 'cut out' of certain business opportunities if you don't 'play the game'.
Another factor for corporates is that by taking voluntary steps to salvage the company, you may have to offer up senior executives as the proverbial sacrificial lamb to prosecutors, and there are likely to be huge implications for the business in so doing.
The approach to be taken by prosecutors is key to assessing the best route for a business which discovers wrongdoing, or in this case, corruption. Before charges can be laid, prosecutors need to weigh not only the evidence against a company and/or officers and other individuals, but also the public interest in prosecuting.
By taking the initiative, should the worst be discovered during an internal investigation, companies are more likely to be able to maintain control of the situation, contain the damage, and potentially extricate the company from a dangerous situation.
Prosecutors are professional, pragmatic and realistic; they will want to encourage good business practice and crime prevention in companies. By being seen to do the right thing, businesses may well be able to tip the 'public interest' consideration in their favour and away from prosecution and that has to be a good thing - both for business and for the tax payer who foots the bill for what can be tortuous, time consuming and hugely costly criminal trials.