Post By: Ty Francis, Chief Advisory Officer, LRN
France adopted its comprehensive anti-corruption framework, Sapin II, in December 2016. Modeled on the U.S. Foreign Corrupt Practices Act (FCPA) and the UK Bribery Act, it is considered a groundbreaking legislation, heralded by the French government at the time “as an essential step in strengthening the values which form the basis of our democratic, economic and social pact.”
Sapin II made it mandatory for companies with more than 500 employees, annual revenues of more than €100 million, and operating in France to implement anti-corruption compliance programs and would impose penalties for companies that fail to comply.
The legislation catapulted France into the international anti-corruption landscape, and among other things, created the French Anti-Corruption Agency (Agence Française Anticorruption “AFA”). The AFA has since conducted hundreds of audits of companies’ anti-corruption efforts. Among the resolutions included in the unprecedented 2020 settlement with Airbus – the largest global foreign bribery resolution in history – was that AFA serve as the corporate monitor of the company.
In January 2021, AFA released its new recommendations for complying with Sapin II. The guidelines supersede the previous version published in December 2017 and are intended to help public and private legal entities strengthen practices that prevent and detect acts of corruption.
The January 2021 guidance is based on three inseparable pillars:
- The first pillar is the commitment of senior management to corruption-free performance of the organization’s tasks, competence or business.
- The second pillar is using risk mapping to raise awareness of the entity’s exposure to corruption risks.
- The third pillar is management of the identified risks by means of effective measures and procedures to prevent and detect any behaviors or situations that violate the code of conduct or that could constitute corruption, and to impose the relevant sanctions.
Other guidance includes effective training of staff; awareness raising for codes of conduct; risk mapping as the cornerstone of anticorruption efforts; and appropriate use of systems, controls and processes to combat corruption.
Taking a step back and putting these new guidelines into a broader context, one can find many of the long-held beliefs and best practices central to the most effective ethics and compliance programs and in other landmark regulatory and prosecutorial guidelines. Among them:
- Programs alone don’t create compliance. Instead aligned and inspired leadership teams and workforces, engaging education efforts built around company values and high ethical standards, and robust and proactive management of risk, and good governance represent effective ethics and compliance efforts. In other words, it is the foundation of an ethical culture that enables a company’s ability to abide by local and international laws AND meet rising expectations for elevated workplace behavior.
- This more elevated and inspired approach requires a marrying of the right leadership oversight, clear expectations for workplace behavior, and systems and programs to reduce risk and support cultural aspirations.
- Compliance programs, governance structures, codes of conduct, ethics trainings, reporting channels are important, but they represent only a part of an effective ethics and compliance effort. A heathy culture, committed leadership and people inspired by a deeper set of human values allows those tools to function effectively.
- Codes of conduct should be engaging and impactful for all employees and third-party partners and relate to real risks and expectations for behavior.
- The appropriate systems and controls are needed but people and the workplace itself must be inspired and animated by leadership and a culture in which doing the right thing enables the meeting of performance goals and furthering of the company’s mission and societal purpose sustainably and over the long term. Leaders must role model how to perform with high ethical standards and be accountable for ensuring the company follows their lead.
- Effective risk efforts must be proactive. That should include ethical culture and behavioral risk assessments. These operationalize ethics and compliance efforts and provide a needed ongoing measurement system to reinforce cultural strengths, address emerging and mitigate ethics and compliance risks, and ensure employees deliver on expectations for behavior in relevant and impactful ways.
This guidance couldn’t have come at a better time. The Wall Street Journal Compliance Officer Survey in late 2020 found the pandemic created a host of new challenges for companies, including a majority reporting new or exacerbated risks caused by the coronavirus. History illustrates that it is in times of crisis when individuals, leadership, business units, or the entire companies may feel pressure to trade principles for short-term performance. Following the new AFA guidance is not mandatory, but recommended and set to provide ethics and compliance professionals additional confidence and assurances in an uncertain world.
About the Author: Ty Francis MBE is the Chief Advisory Officer at LRN where he leads LRN’s worldwide ethics & compliance and board advisory consulting business. He helps companies reinvent and rewrite codes of conduct, deliver policy simplification, provide strategic E&C program evaluations, and conducts ethics and culture assessments.
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