Case Study

Giving the boot to corruption

How one firm set up vendor screening and got rid of high-risk suppliers

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Who we worked with

A major US footwear and apparel leader with a 150-country reach.

What the company needed

A framework for assessing and improving controls and compliance with anti-corruption laws throughout its widespread global enterprise.

How we helped

We conducted an in-depth risk assessment and due-diligence screening review of vendors in high-risk countries, then built a robust compliance and governance mechanism based on what we learned.

What the company got

More thorough compliance with the Foreign Corrupt Practices Act (FCPA) and other anti-corruption regulations.

A leading American multinational that designs, manufactures, and retails footwear and sports apparel around the globe faced a real risk. It was hard to make sure it was complying with all the anti-bribery laws in the 150 companies in which it operates. Genpact conducted a thorough screening of vendors in high-risk countries, performed risk assessments to identify control gaps in key high-risk processes, and designed a comprehensive framework for anti-corruption monitoring to drive tighter compliance.

Challenge

Develop a vigorous anti-corruption framework that is consistent worldwide

Working in more than 150 countries exposed the company to a significant risk of violating various anticorruption laws such as the Foreign Corrupt Practices Act (FCPA). Compliance was complicated by:

  • No mechanism for screening new vendors or evaluating the client’s 120,000 existing vendors for FCPA compliance
  • Poor risk assessments to identify and mitigate anti-corruption across critical processes
  • Inadequate monitoring of high-risk spends, travel and entertainment (T&E) expenses, and promotional products

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Solution

Scour the existing risk management system. Eliminate questionable vendors. Close gaps. Apply analytics to find red flags

After we did a thorough risk assessment in seven high-risk countries, we created a robust regulatory compliance and governance framework. We used our relationship with Lexis-Nexis to design and build a more comprehensive vendor screening process and compliance framework with built-in data analytics that includes:

Vendor screening process

  • We screened a database of about 120,000 vendors in high-risk territories to identify and eliminate those involved in bribery
  • Reported potential true hits for review and action
  • Screened all additional vendors after the initial review

Risk assessment

  • Identified control gaps in key high-risk processes such as T&E, gifts, donations, and complimentary/promotional products, and performed sample testing for operational effectiveness
  • Identified root causes for control gaps and recommended a comparative framework to formulate guidelines for mitigating corruption risks

Data analytics

  • Performed FCPA analytics on the T&E and complimentary/promotional product categories to identify and understand FCPA red flags

Impact

A clean house, happier FCPA officials—and millions of dollars in savings

Genpact delivered more robust compliance in addition to significant savings by:

  • Identifying 24 potential blacklisted vendors doing business worth $10 million with the company
  • Eliminating blacklisted vendors, which saved the company millions of dollars in penalties

What’s more, we also:

  • Identified places in the marketing process where people were misusing complementary products
  • Created a framework for periodic screening to report FCPA sanctions for existing vendors, and recommended screening for new suppliers
  • Delivered a robust FCPA compliance and anti-corruption monitoring framework
  • Enabled an enhanced control and compliance environment

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