Blog

Aside from the hefty US$800M* settlement fine imposed, one of the key talking points (re-?) generated from the Rolls Royce corruption scandal is the appointment of the agent / intermediary in conducting business in emerging markets and the risks entailed by such engagement.

It’s difficult to argue in favour of employing agents / intermediaries (or what Martin Kenney so aptly describes as his “…pet dislikes…”) for they have – more often than not – acquired notoriety as being greasers of palms.

Death of an Agent?

Kenney further points to the 133-year old propulsion industry giant’s expressing the need to end the use of third-parties. Could this really be the prologue to the death of agents and intermediaries? Would the days where “…directors will be able to enjoy a good night’s sleep…” (from Kenney’s article) be arriving finally?

The Agent of Death

Don’t mean to sound pessimistic: but, it’s definitely too optimistic (at the very least, a bit unrealistic) in setting target to eradicate completely the usage of agents/intermediaries in a business context.

A company simply could not have all the relevant expertise and knowledge in the over-all business process; as a result, a company would need to retain the services of third-parties to fulfill such need.

Two key topics to ponder in engaging agents / intermediaries:-

1. Is there a real + legitimate business purpose in the hiring of the 3^rd party?
2. Are there robust and transparent screening and monitoring processes in place?

Rolls Royce’s serious brush with the law may well feel like (I could only imagine) brush with “The Agents of Death”; metaphorically speaking, the true Agents of Death are NOT the SFO or the DOJ, but may well be Rolls Royce’s not paying the due care and attention to the details of its compliance program like how it would in building propulsion products (see highlights of Justice Leveson’s judgment)

The US$800M bribery-related fine may not have flat-lined Rolls Royce; however, the same may not be said for its reputation.

 

Reference:-

*just to give US$800M a bit of perspective –> Let’s suppose the non-refillable and non-interest-bearing wallet of “The Big-Man-Upstairs” contains US$800M and He has been giving His Son a per diem of US$1,000 since His Son’s date of birth.  Almighty’s wallet would STILL not be emptied up to the date this blog is published (March 2017).

(1) Martin Kenney’s article:-

http://www.fcpablog.com/blog/2017/1/26/rolls-royce-aftermath-should-we-all-stop-using-agents.html

(2) Highlights of Justice Leveson’s judgment

http://fcpacompliancereport.com/2017/01/11446/

 

Meet Ernest (on left). My pal for almost 30 years. Technologist at one of the biggest i-Banks.

Ernest and I are avid Star Wars fans. We met up recently over coffee not to discuss the acting in Rogue One; but for some hunches-colliding, WhiteHatGuys-style!

My Renaissance friend’s interested to pick my brain on compliance topics; whilst I solicited his expertise to enhance the interface of www.whitehatguys.com.

Thanks to my IT buddy, the “not-so-tech-savvy” me could now perform editing and updating tasks on the site; and Ernest got his feet wet in the field of IT compliance, vis-à-vis a brief peek into cybersecurity law to be implemented in the PRC:-

1. Company operates with / in possession of Critical Information Infrastructure (“CII”) would need to store such CII in a locally-based server and stay local.
2.  Critical Information Infrastructure is defined as “… in case of destruction, loss of function or theft / leakage of the same will undermine national security, national economy and people’s livelihood or public interest…”
3.  For ISP –> more stringent controls on “real-name” requirements; net users won’t be able to hide behind the veil of anonymity.
4.  The law to take effect officially on 1^st June 2017; it’s expected – as typical of initial phase of implementation of new regulations — that there will be tailoring-on-the-fly to further refine and define the operating framework. So, stay tune!

From an early age, we are repeatedly taught to be honest, to do no harm; In the business world, we are constantly reminded that Ethics (following the rules) and Integrity (doing the right things) are the essential behaviours that breed success.

Conventional wisdom seems to tell us that the main drive in sustaining success or maintaining consistency of any sort is to brush up on (even fix up) the basics, continuously…

From the corridors of power of a Fortune 500 MNC… to the exterior wall of a school located in an island with roughly 600 inhabits… There should be a banner/poster that reads: “Honesty is the Best Policy”, or a similar simple and on-point slogan that reinforces emphasis on ethics and integrity – the basis of sustainable success.