Wednesday, January 20, 2021
Corporate Compliance Insights
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Articles
    • See All Articles
    • NEW: COVID-Related
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Leadership and Career
  • Vendor News
  • Jobs
  • Events
    • Webinars & Events
    • Submit an Event
  • Downloads
    • eBooks
    • Whitepapers
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
  • Home
  • About
    • About CCI
    • Writing for CCI
    • NEW: CCI Press – Book Publishing
    • Advertise With Us
  • Articles
    • See All Articles
    • NEW: COVID-Related
    • Compliance
    • Ethics
    • Risk
    • FCPA
    • Governance
    • Fraud
    • Internal Audit
    • HR Compliance
    • Cybersecurity
    • Data Privacy
    • Financial Services
    • Leadership and Career
  • Vendor News
  • Jobs
  • Events
    • Webinars & Events
    • Submit an Event
  • Downloads
    • eBooks
    • Whitepapers
  • Podcasts
  • Videos
  • Subscribe
No Result
View All Result
Corporate Compliance Insights
Home GRC Vendor News

Companies that Use Suppliers with Political “Connections” May Damage Reputation

by Corporate Compliance Insights
June 28, 2016
in GRC Vendor News
Companies that Use Suppliers with Political “Connections” May Damage Reputation

Compliance Expert Cites Risk Areas – and How to Avoid Them

Tempe, AZ (June 28, 2016) – Politics certainly are top-of-mind for Americans as the Presidential race heats up this summer. It also should be ever present in the minds of corporate management when making decisions about suppliers, says an executive who advises companies on integrity and compliance risk issues.

“Your supplier potentially could damage your reputation by associating with a certain government or political party,” said Scott Lane, Executive Chairman of The Red Flag Group, which counsels executives at major companies globally.

“Even though most companies have policies about engaging suppliers with links to political parties, political officials or people heavily involved in government to protect impartiality of the firm and ensure there is minimal risk of bias toward a particular government or political party, great care still must be taken,” he said.

“There may not be many suppliers that directly engage with political parties or governments,” Lane explained. “But a good number do aim to gain benefits by means of political influence. Merely being involved with one of those suppliers might be detrimental to a company’s reputation.”

What kinds of organizations to watch for? Lane cited:

  • “No-bid” firms. These are suppliers that constantly win deals with government entities without official or public bids.
  • State-run companies. A good example is the fishing products supplier 60 percent owned by the Chilean government.
  • Law firms. A company may engage a law firm to provide counsel on proposed legislation and then learn the firm is linked to a government or political party.
  • Public relations firms. Similarly, a company retains a PR agency that has ties to a particularly political party.
  • Lobbying groups.
  • Trade unions.

“Another example where this supplier risk can affect organizations is at an individual level with politically exposed persons,” said Lane. “These are individuals who are in, or have been entrusted with, prominent public functions with a country/state or at an international level, as well as their immediate family members or closes associates. This could be the CEO of a lobbying company you just hired being the son of the Minister of Commerce.”

What should companies do to ensure suppliers do not have such political entanglements? Lane recommends three areas of scrutiny:

  • Conduct detailed due diligence on suppliers’ connections and relationships with government officials, an initiative often conducted by a third-party entity.
  • Conduct audits of their political activities.
  • Review suppliers’ policies toward gifts and entertainment.

“Most companies believe reputational damage through integrity risks arise directly through the activities of the company itself,” said Lane. “Yet, in many cases, damage occurs based on the way third parties such as suppliers conduct business. The political arena without question is a risk area to be monitored.”

About The Red Flag Group

The Red Flag Group is a global integrity and compliance risk firm. It applies its unique set of advice, technology and business intelligence applications to manage the integrity and compliance risks of its customers. The Red Flag Group assists companies in developing and maintaining efficient and effective corporate governance and compliance programs and has a proven track record in providing integrity due diligence investigations in 194 countries. For more information, visit www.redflaggroup.com.


Tags: reputation risk
Previous Post

Who Can Fire a CCO?

Next Post

Privacy Shield in Limbo

Corporate Compliance Insights

Related Posts

yellow job search box speech bubble

Fortune 500 Job Descriptions Are Still Biased Toward Men

January 12, 2021
cash

Banks Worldwide Amass $15B in Fines in 2020, U.S. Banks Account for 73%

January 11, 2021
cyber attack malware encrypted files and lock on cloud

Telos Announces Latest Version of its Next-Generation Cyber Risk Management Platform

January 7, 2021
Hologram of whatsapp logo over smartphone

Shield and TeleMessage to Deliver Direct Capture of Mobile and WhatsApp Communications

January 5, 2021
Next Post
Data governance a challenge in the wake of Safe Harbor

Privacy Shield in Limbo

Access realtime data

Special Coverage

Special COVID page graphic

Jump to a Topic:

anti-corruption anti-money laundering/AML Artificial Intelligence/A.I. automation banks board of directors board risk oversight bribery CCPA/California Consumer Privacy Act Cloud Compliance communications management Coronavirus/COVID-19 corporate culture crisis management culture of ethics cyber crime cyber risk data analytics data breach data governance decision-making diversity DOJ due diligence fcpa enforcement actions financial crime GDPR GRC HIPAA information security internal audit KYC/know your customer machine learning monitoring regtech reputation risk risk assessment Sanctions SEC social media risk technology third party risk management tone at the top training whistleblowing
No Result
View All Result

Privacy Policy

Follow Us

  • Facebook
  • Twitter
  • LinkedIn
  • RSS Feed

Category

  • CCI Press
  • Compliance
  • Compliance Podcasts
  • Cybersecurity
  • Data Privacy
  • eBooks
  • Ethics
  • FCPA
  • Featured
  • Financial Services
  • Fraud
  • Governance
  • GRC Vendor News
  • HR Compliance
  • Internal Audit
  • Leadership and Career
  • Opinion
  • Resource Library
  • Risk
  • Uncategorized
  • Videos
  • Webinars
  • Whitepapers

© 2019 Corporate Compliance Insights

No Result
View All Result
  • Home
  • About
  • Articles
  • Vendor News
  • Podcasts
  • Videos
  • Whitepapers
  • eBooks
  • Events
  • Jobs
  • Subscribe

© 2019 Corporate Compliance Insights