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New partnership to fight corporate fraud

Ross O. Storey | Feb. 10, 2010
MIS Asia editor Ross O. Storey asked Global Compliance CEO, Jim Burke, how important it was for Asia enterprises to have compliance management solutions in place and what risks they faced if they dont.

How aware are Asia Pacific managements and boards of the threats posed by corporate fraud and how prepared are they to deal with these threats?

Asia Pacific management are increasingly aware of the threats given the recent publicity of companies engaged in misconduct. Our clients in the Global 500 typically have some type of program in place today, but most smaller or mid-size clients are not equipped with programs to identify and deal with issues without the support of a compliance partner.

However, the lack of effectives programs is not a question of will, but rather one of awareness and understanding of how organizations benefit from ethics and compliance solutions.  

How would you describe the current compliance oversight regimes in the world today and how tough are they becoming? What do you see as the likely future requirements that will have to be met by Asia Pacific enterprises?

We see more companies being prosecuted for misconduct by oversight organizations. Examples include Siemens, Satyam and others. I think we will see more legislation like that in Japan that followed the US Sarbanes-Oxley legislation. The changes will be driven by governments and business working together to form seamless global solutions.  

The adherence to effective ethics and compliance programs cannot be mandated by one government or regulatory body; the global business economy needs global rules of engagement and regulations.  And regulators are becoming increasingly aggressive in cross-border investigations and prosecutions.  While we cannot speak for regulators, we believe that laws that have worked in the US and Europe will play an increasingly important role in the Asian regulatory landscape.

Can you please further explain what a whistle blower hotline is and how it works for enterprises? What corporate whistle blower success stories in APAC can you highlight?

Implementing and maintaining a confidential and anonymous reporting system is a critical measure for organizations that are committed to fostering a culture of integrity and compliance.

Known by many names - ethics hotlines, compliance hotlines, whistleblower hotlines - a confidential hotline can be an important source of information, providing a communication channel for employees, vendors, agents, and other stakeholders to report behaviors that can be harmful to an organizations reputation, morale, and financial well-being.

A confidential and anonymous reporting mechanism is required by The Sarbanes-Oxley Act of 2002 for companies traded on U.S. Stock exchanges, but organizations of all types have moved to adopt confidential reporting vehicles as a means to mitigate risk through early detection and resolution.  

A whistleblower hotline includes phone and web reporting channels, and typically includes a case management software solution.  With multiple business units and functions to oversee, its difficult to capture and manage information about potential misconduct throughout an organization, ensure that information is being documented consistently and thoroughly, confirm that allegations being investigated and resolved in a timely manner, and analyze accurate program data in order to spot trends and identify risks.  A case management system is a comprehensive solution to help an organization establish and enforce consistent processes for the reporting, investigation, resolution and analysis of issues and events.


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