The Organisation for Economic Cooperation and Development (OECD) has revised its guidance for multinational businesses to reflect the increasingly complex world in which they operate.
The 2023 OECD Guidelines for Multinational Enterprises on Responsible Business Conduct is the first refresh of the body’s recommendations for 12 years.
The updates reflect current social, political and environmental issues, aligning the Guidelines with recent EU regulatory developments, including technology considerations, emission reduction targets, human rights and corruption.
The central theme of the updated guidance is to encourage global businesses to crack down on corruption, underlining the fact that the ‘nature, scope and speed of economic changes have presented new strategic challenges for enterprises and their stakeholders.’
At the same time, multinational enterprises themselves have shifted their position, with many forging closer relationships with suppliers and contractors, realising that maintaining high standards of business conduct aids growth and profitability.
The Guidelines aim to help in this regard, urging multinationals to apply due diligence on all forms of corruption through the adoption of control and compliance programmes which should include the maintenance of fair and accurate books and records to guard against bribery and other acts of corruption.
Whistleblowing policy is also an area where multinationals should take care. The Guidance recommends safeguards for employees so that they feel safe if reporting any business practices that contravene the law.
This latest guidance comes as the Economic Crime and Corporate Transparency Bill reaches the final stages of Parliament before it is given royal assent.
The Bill is set to bring about the following changes by:
- Introducing modifications to Companies House;
- Implementing changes aimed at stopping the misuse of limited partnerships;
- Incorporating more capabilities to apprehend and reclaim potential criminal cryptoassets;
- Empowering businesses to share information more confidently and to address money laundering and other financial offences and
- Establishing new intelligence acquisition abilities for law enforcement and other watchdogs while abolishing unnecessary obligations on businesses.
Helen Gregory, Forensic Director at Milsted Langdon, said: “The new Guidelines provide a structure by which organisations can make improvements to their organisation and reaffirm regulatory expectations around corruption and come at a time when many organisations are having to consider the impact of the Economic Crime and Corporate Transparency Bill.
“Given the demand for change in this area from regulators and legislators, it is important that businesses review their existing process and risk assessments to ensure that they are compliant.
“Bringing in the expertise of a forensic accountant can not only help to spot weaknesses and provide preventative measures, but should the worst happen, offer firms a resource by which to act on illegal activities associated with their organisation.”
Source: Client’s own (ICAEW)