We build Transport for the North John Cridland for a better - PDF document

Upfront magazine We build for a better society issue #7: 17, June A Skanska publication in print • online Inside this issue Creating a positive legacy K&L Gates Clarissa Coleman We build Transport for the North John Cridland for a better Spitalfields Crypt Trust Gary Davidge Open-City Rory Olcayto society Marks and Spencer Munish Datta Anglian Water Andy Brown Plan A: Putting First-class act sustainability at the heart How Bristol’s of Marks and Spencer schools have been New currency: How transformed natural capital helps protect the environment

Tie ethical front line Lawyer Clarissa Coleman believes that ethics really do matter in business Photography The Fold London (thefoldlondon.com) [ 12 ] [ 13 ]

“ Put simply, the fjnancial, reputational and ofuen criminal consequences of failing to act in an ethical way can be enormous. ” larissa Coleman by the Serious Fraud Offjce (SFO) and whether they may be C is a partner in in 2011, following the collapse of found criminally liable.” the Litigation Kaupthing Bank in Iceland. Department at the In another high-profjle case, global law fjrm K&L Tchenguiz was arrested and his involving the FTSE 100 mining Gates LLP. She has acted for several home and offjces searched in a company ENRC plc, Coleman was organisations that have been dawn raid by the SFO. Coleman drafued in to act as Deputy General investigated for misconduct, so co-ordinated the immediate Counsel to assist with an internal knows more than most about the response on the morning of the investigation into claims of fraud, importance of ethics in business. dawn raid and then planned the bribery and corruption. subsequent judicial review against Coleman says: “ A key factor in the the SFO. In 2012, the High Court “Tie fallout from an allegation or long-term success and stability declared that the search warrants actual discovery of misconduct can of an organisation is its approach used in the dawn raid were be huge. Share price and balance to ethics. Honesty, integrity and unlawful and criticised the SFO’s sheet may be hit; business contracts professional conduct are basic handling of its investigation. withdrawn or rescinded; expensive, behaviours that underpin business time-consuming and distracting reputation. And reputation is Tie SFO admitted serious mistakes internal and external investigations one of an organisation’s most in its investigation, which was triggered; third-party legal actions important assets in terms of later dropped without any charges commenced; the stress, worry and driving profjtability and attracting being pressed. Tchenguiz sued the uncertainty will almost certainly Photography The Fold London (thefoldlondon.com) and retaining employees, investors SFO, resulting in an undisclosed impact productivity and stafg and business partners.” settlement and a public apology. retention; and regulators may end up imposing crippling fjnes. Coleman was Head of Litigation Coleman notes: “ An investigation at Consensus Business Group, the can really take its toll on “Put simply, the fjnancial, property investment fjrm owned by individuals. Tiey are worried reputational and ofuen criminal businessman Vincent Tchenguiz, about their jobs, about the long- consequences of failing to act in an during a high-profjle investigation term health of their company, ethical way can be enormous.” [ 14 ] [ 15 ]

The price of dishonesty rich and famous by the release Corruption can cost companies of the Panama papers in the eye-watering sums of money. world’s largest-ever leak of An engineering company ended confjdential information. up losing $292 million, afuer paying a $1 million bribe to get a A total of 11.5 million documents “ $1 billion contract. Tie company from the database of the was fjned $18 million, had to pay Panamanian law fjrm Mossack $74 million in forensic accounting Fonseca were given to journalists. Embedding business ethics and compliance costs, and the Tiese gave details about the contract value was reduced use of tax havens and secretive into company culture is a by $200 million. ofgshore tax regimes, which drew much criticism from the media. fundamental aspect of responsible Photography The Fold London (thefoldlondon.com) In August 2016, Barclays Bank management. was fjned another $100 million “Unlike tax evasion, tax avoidance in the US, following the London is legal. Closing tax loopholes inter-bank ofgered rate (LIBOR) is the most efgective way to deal ” fjxing scandal. Tiis was on top of with tax avoidance. However, earlier fjnes of $498 million and the basic point at issue here is £59.5 million in the US and UK. whether tax-avoidance schemes are ethical in the fjrst place. Is it Legality vs morality fair that the very rich can avoid In April 2016, a spotlight was paying tax when ordinary people shone on the tax afgairs of the cannot?” remarks Coleman. [ 16 ] [ 17 ]

Fraud supported and protected when According to auditor KPMG’s reporting concerns. Senior six-monthly report into fraud in management should demonstrate the UK, £328 million was stolen in a commitment to whistle- the fjrst half of 2016. Areas such as blowing and this message must London, the south-east of England be communicated throughout and the midlands were hotspots. the organisation. Company Businesses, particularly small and policy should require that all medium-sized ones, were cheated allegations are documented, out of £95 million. In the midlands, promptly investigated and which accounts for 42 per cent then reported at the highest of UK fraud, managers were the levels within the organisation. worst ofgenders. Covering up wrongdoing should never be an option.” Tie scale of fraud can be enormous. Corporate culture In one case alone, a Dutch shipping company was conned into paying “Embedding business ethics into a gang £73 million by a man in company culture is a fundamental London who posed as the Pope’s aspect of responsible management banker. Tie fraudster was jailed and critical to long-term success. Photography The Fold London (thefoldlondon.com) Whistle-blowing for 14 years. “Individual cases of fraud can detection, encouraging them to has now implemented a series A top-down compliance culture vary greatly in terms of scale and proactively monitor for fraud and Tie importance of whistle-blowing of measures to support whistle- is key to minimising risk. Senior A 2015 report by the accountants sophistication. Implementing empowering them to take the has been recognised by the NHS. blowers and make it easier to management should be visibly PKF, together with the University comprehensive fraud prevention initiative to follow up on concerns ‘Freedom to Speak Up’ , a report raise concerns. engaged in promoting and of Portsmouth’s Centre for Counter policies and controls could be are important and highly efgective by Sir Robert Francis, took direct reinforcing internal corporate Fraud Studies, suggested that fraud the difgerence between success measures. Communicating evidence from over 600 people, “Confronting unethical or values. In fact, business leaders could be costing the NHS around and failure of your business,” internally and externally that your while over 19,500 took part in an illegal behaviour takes courage. should regularly assess the culture £5.7 billion a year. Tie budget of says Coleman. “Honest and company takes fraud prevention online survey. It found that many Organisations need to make sure of their organisation to ensure that the NHS in 2015 was just over vigilant employees are your best seriously and has robust controls people were afraid to speak up that they create an environment the right behaviours are playing £116 billion, which shows the size assets in the fjght against fraud. in place will also help deter about issues because they were where individuals feel that out and messaging on ethics of the problem. Training relevant employees in fraudulent behaviour.” afraid of victimisation. Tie NHS they will be taken seriously, remains powerful and fresh.” [ 18 ] [ 19 ]