The Corruption Perception Index is a useful measure for assessing national levels of corruption, but it’s static and too simplistic for modern compliance needs. Given the many dynamic program possibilities offered by new technology, I believe the most effective strategy for compliance teams is to keep the CPI as a tool in their toolbelt, while also leveraging dynamic assessments that expose the hidden risks of individual third parties. I recently contributed an article to CEOWORLD Magazine that outlines how to capture the information needed to build a strong compliance program. In part:
“Large companies have come to rely heavily on the CPI to guide their decisions on monitoring third-party agents and providers. If a country’s CPI score drops, compliance departments will usually allocate more due diligence resources to third parties in that jurisdiction.
This strategy brushes a whole country with the same ranking for bribery and corruption risk. Yet the reality is far more nuanced. This leads to major inefficiencies and overlooks risks in corporate compliance programs.
The CPI is, and will continue to be, a valuable part of the compliance tool kit. But companies need to factor in a range of more dynamic metrics to create a truly sophisticated and efficient program. That’s because dynamic factors — which change over time and have multiple data points — are just as important to monitor as static factors. “
READ THE FULL ARTICLE – How over-reliance on the CPI creates compliance risks and inefficient spending: https://ceoworld.biz/2021/02/25/when-the-compliance-gold-standard-still-isnt-enough/