15.01.2019

In order to develop a strong compliance program, a company must first understand the risks associated with its operations and surrounding environment. A corruption risk can be defined as any process or scenario where the opportunity for corruption may arise.

Many companies already perform some type of risk assessment through existing Enterprise Risk Management (ERM) processes. This includes formal management systems like ISO 9000 (quality management) or ISO 14001 (environmental management). An ethics and compliance assessment can be integrated with ERM processes in other areas of risk. Ethics and compliance risk assessment is performed as a separate procedure or as part of an enterprise risk management system and has the same objective: to understand your company’s corruption risk profile.

First, you need to know your industry and its risks.

The following industries globally are particularly prone to corruption
public works and construction
arms and defense
oil and gas	real estate
power generation and transmission, mining,
transportation and storage
pharmaceuticals and medical care
telecommunications
heavy manufacturing

Then, based on your knowledge of the field, business environment, and company internal structure and functionality, assess corruption risks and perform risk management. Involve legal councel and other functional subdivisions of the company (information technology, human resource management or internal audit) as well as heads of structural subdivisions.

This goal is to ensure the involvement staff at all levels and the transparency of the risk assessment process.

Source: Center for International Private Enterprise

This material has been prepared in the scope of the “Armenia: Promoting Anti-Corruption Conduct and Reforms” Project implemented by the “Center for International Private Enterprise”, the “Armenian Lawyers’ Association” NGO, the “Corporate Governance Center” NGO and the “Yerevan Chamber of Commerce and Industry” with financial support of the National Endowment for Democracy. The project is implemented as a co-financing to the “Commitment to Constructive Dialogue” action implemented with the financial support of the European Union by a Consortium comprising the “Armenian Lawyers’ Association” NGO, the “Armenian Center for Democratic Education-CIVITAS” NGO, the “International Center for Human Development” NGO, the “SME Cooperation Association” NGO, the Union of Communities of Armenia, as well as “Agora Central Europe” NGO (Czech Republic). The contents of this material are the sole responsibility of the “Armenian Lawyers’ Association” NGO and can in no way be taken to reflect the views of the National Endowment for Democracy and the European Union.