Investors from leading United States, United Kingdom, European, and Australian institutions issued a formal statement detailing their support of the thirty-five year old anti-bribery law, the U.S. Foreign Corrupt Practices Act (FCPA), and its rigorous enforcement.
Investment institutions, including First Affirmative Financial Network, released the statement in response to efforts by many influential parties, including the US Chamber of Commerce, to lighten enforcement of many key provisions in the FCPA.
The investors “believe that poor control of corruption and bribery can be an indicator of future risk at global corporations and can thereby negatively impact long-term shareholder value.” From an investor perspective, the compliance requirements embodied in anti-corruption efforts are a necessary part of the risk management process for global corporations.
The statement cites the recent allegations of an extensive bribery scheme by Walmart de Mexico to underscore the point. They also note that corruption and bribery undermine competition, create problems for local economies, and contribute to the erosion of important democratic institutions.
The lead author of the investor statement, Adam Kanzer, Managing Director & General Counsel of Domini Social Investments, said: “A significant coalition of global investors has come together to make a very clear statement—bribery and corruption is bad for society, bad for business and bad for our investments. Our statement details the very significant risks presented by these activities, from legal consequences to impacts on the economic development and the realization of human rights.”
Mention of specific companies or securities should not be considered a recommendation to buy or sell that security. Past performance is never a guarantee of future results.
Posted: December 3, 2012