Coming out of the dark

Third-party governance is not about eliminating risks but managing it appropriately

Earlier this year, a large global organisation with significant India presence found itself answering difficult questions posed by a US investigation team under the Foreign Corrupt Practices Act (FCPA) around the actions of the company’s third-party distributors constituting the vast majority of its marketing network. Should malpractice such as bribery be eventually established in this third-party network, the primary organisation faces a hefty fine and significant reputation damage that will negatively impact share prices and profitability. Elsewhere, a few years ago, another non US-headquartered multinational company was fined $772 million for similar FCPA action resulting from inappropriate conduct of third-party