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To evolve in the right direction in 2022, we need to review what 2021 taught us. Compliance tips, key events and analytics — all in a nutshell for you to remember.
Prioritize ESG. You'll often hear about ESG (Environmental, Social and Corporate Governance) - not only in our blog but also in your professional and non-professional environment. If your company is not environmentally and socially responsible yet, it is worth pushing this initiative along with regular financial controls.
Focus on security. Certification, security policies, and emergency procedures are vital for both big and small companies - any information leak is detrimental and leads to fewer clients and profits. At the same time, the absence of proper data security controls if the company is under investigation will significantly increase the fines and responsibility for the data leak.
Whistleblowing is a complex process - treat it as such. Key lessons from the new ISO 37002:
The most visible actors in compliance, whistleblowing, anti-corruption, and risk management remain the same. ISO has issued new standards for whistleblowing management systems; the DOJ and SEC outlined a strategy for engaging whistleblowers, identifying more risks, and encouraging companies to report ongoing investigations.
Local legislative bodies of the EU member countries have been particularly active in passing the new whistleblowing laws - the same applied to Hong Kong and Australia, which made attempts to reevaluate existing provisions.
Intense and comprehensive work was carried out in 2021 on whistleblower laws in the EU - it is still the most global whistleblowing project and regulation. According to the Whistleblowing monitor, only 6 EU countries implemented local whistleblower laws: Cyprus, Denmark, Lithuania, Portugal, Malta, and Sweden. The deadline for implementation was the end of December 2021, so the majority of the countries are behind the timeline, and one EU member did not start the transposal at all (Hungary).
Not Europe only: New York expanded its whistleblower statute allowing more types of employees (including former ones) to report and adding the premise of "reasonable belief" that the information is accurate and important. Australia also intends to update its whistleblowing provisions in the public sector to include former employees, remove secrecy offenses, shift the burden of proof to the employer and extend the scope of detriment.
ESG - the new black for 2021 and 2022 accordingly. The importance of ethical governance is widely discussed: major audit companies always include it in the trends and mark it as a key factor for attracting investors. All three components: environmental, social, and governance criteria, are equally crucial for the company's reputation and show how risky the investments can be.
Additionally, ESG criteria are already included in certain companies' financial product development and marketing strategies. The way you treat your employees and help the environment expand compliance beyond audit, record-keeping, and transparency.
Three important ISO regulations as of 2021:
ISO 37002 Whistleblowing management systems. A comprehensive guideline for establishing and maintaining a WMS: principles, ethics, values, and protection from conflict of interest can be found here.
ISO 37001 Anti-bribery management systems. Adaptable guide for companies that need transparency and avoid financial risks: controls, procedures, and risk assessment are introduced in this standard.
ISO 37000:2021 Governance of organizations. This guideline to train know-how-needed specialists in governance for any organization includes directly responsible employees, stakeholders, and all persons involved in building the organization.
2021 has been a record-breaking year for FCPA charges – the lowest fines and number of disclosed ongoing investigations in recent years. As usual, we prepared the analytics and case summary. In 2021 the total fines by SEC and DOJ were around $500 million, with Credit Suisse getting the highest charges ($275 million).
The most common violation is bribery of foreign officials, subsidiaries, and contractors, and inappropriate record-keeping. DOJ and SEC are challenged with an overall trend of decreasing open investigations in the companies. It is a question of whether the regulators can be more efficient in identifying misconduct and prosecuting it accordingly.
Three pieces of advice from Allison Herren Lee: to succeed in ESG, enhance board diversity, increase board expertise, and inspire management success.
Whistleblowing attracted more attention in 2021 – mainly, you've been interested in whistleblowing laws in the EU. Anonymity, whistleblowing in social media, and whistleblower cases are among the top queries and will stay with us in 2022.
Here is our list of top-performing articles:
Thank you for being with us and leaving feedback – more and more to come in 2022!
Credits for the illustrations:
Illustration by Ekaterina Ziyatova from Ouch!
Illustration by Tatyana Krasutskaya from Ouch!
Illustration by Polina Golubeva from Ouch!
Illustration by Tatyana Krasutskaya from Ouch!