Recently Trace International released its Trace Bribery Risk Matrix.
Like other rankings of bribery and corruption, there is nothing per se wrong with the Bribery Risk Matrix. However, as stated several times on these pages (see here and here), I am not sure what these rankings really do (other than generate media coverage for the organization releasing the rankings) given that they generally restate the obvious (hence the picture of “Captain Obvious”).
For instance, does the compliance community really need a formula such as:
Domain_1 x 0.400 + Domain_2 x 0.150 + Domain_3 x 0.225 + Domain_4 x 0.225
to alert compliance professionals that doing business in North Korea, Turkmenistan, South Sudan and Venezuela presents a higher “possibility of being asked for a bribe by a foreign public official” compared to Denmark, Norway, Finland and Sweden?
I am pretty sure that the compliance community already understands this.
Again, there is nothing wrong with “data” to reinforce these observable truths, but other than generating media coverage for the organization releasing the rankings, I am not sure what such rankings really accomplish.
Regarding the above referenced formula, as Trace explains the Matrix
“provides an overall risk score and risk scores in four domains deemed to be indicators of potential business bribery risk:
1. Business Interactions with Government;
2. Anti-bribery Deterrence and Enforcement;
3. Government and Civil Service Transparency;
4. Capacity for Civil Society Oversight.
The first domain, “business interactions with government,” includes the subdomains of “contact with government,” “expectation of paying bribes,” and “regulatory burden.” These indicators capture aspects of government touchpoints …
The second domain, Anti-Bribery Deterrence and Enforcement, identifies factors operating to deter bribery, both informally through societal attitudes and formally through government enforcement.
The third domain, Government and Civil Service Transparency, addresses government and civil service transparency and includes indicators concerning whether government budgets are publicly available and whether there are regulations addressing conflicts of interest for civil servants.
The fourth domain, Capacity for Civil Society Oversight, draws on information concerning the extent of press freedom and civic engagement, both of which serve as indicators of robust civil society that can provide oversight of government.
Several of these “domains” seek to capture rather soft and fluffy topics such as societal attitudes, transparency, press freedom and civic engagement. Query whether any of these issues have meaningful value to compliance professionals seeking to manage and mitigate FCPA (and related) risk on a daily basis.