Due diligence in ISO 37001:2016 Anti-bribery Management System

due diligence

Due diligence in ISO 37001:2016 Anti-bribery Management System

due diligenceTo prevent bribery from occurring, the corporation needs to do a ‘clean-up’. Not only internally but externally too, that is, in relation to third parties. If a third party is involved in a violation, the company’s reputation as a partner is also risky even though the corporation is not directly involved in the violation.

Therefore, companies must conduct due diligence on prospective third parties to ensure that they uphold ethics and law.

What is due diligence?

Due diligence is a thorough investigation conducted prior to a business or investment transaction. Similar to an investigation, its purpose is to gather and analyze as much information as possible about the other parties that will be involved in the transaction. By analyzing the information, corporation can identify potential parties that are at high risk of bribery.

Considering the importance of due diligence in minimizing the risk of bribery, ISO 37001:2016  Anti-Bribery Management System (ABMS) includes it as a certification requirement. Clause 8.2 of ISO 37001 8.2, states that a company shall assess the nature of the bribery risks in relation to specific transactions, projects, activities, business associates and personnel, and shall be updated at a defined frequency so that new information can be taken into account.

Proportionate and reasonable

Conducting proper due diligence becomes challenging for the company because while the key is in the ‘proportionate and reasonable’ requirements relative to corporations’ size and bribery exposure, it also takes a lot of time to do it.

For a high-risk prospective third party, the corporation must perform comprehensive due diligence. Beyond assessing the third party’s track record, reputation, and operations, corporations should also investigate the backgrounds of its top executives and shareholders, especially concerning the Politically Exposed Persons (PEP) list.

Analyzing the results of due diligence requires skilled personnel. Red flags are not always in the form of negative findings; unverifiable evidence can also be included in that category or marked for further investigation. Therefore, corporations should hire personnel with the necessary skills and experience in conducting this crucial process.

Latest technology

Integrity Indonesia is ready to assist you in setting up your corporation’s Anti-Bribery Management System, including in providing due diligence services to third parties through Know Your Vendor Solutions. Our staff and analysts use different methodologies for conducting due diligence, depending on your corporations’ requirements.

Using old fashioned-tools to manage your vendor is tiring and unreliable, especially if your company has a high number of vendors. Know Your Vendor Solution provides a Vendor Management System, the latest technology available to monitor your third party-partners, and an encrypted system that makes your due diligence run safely, efficiently, and more reliably. For more information, please visit knowyourvendor.net.



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