Anti-Fraud, Anti-Corruption and Bribery Risk Management

Governance, “tone from the top” and accountability architecture

A robust governance architecture for fraud and corruption risks begins with the formal establishment of board-level ownership, with clear mandates and documented responsibilities that extend beyond symbolic statements of support. Board decision-making should expressly address which risks fall within scope, which norms apply (including an explicit zero-tolerance position in relation to bribery), and how oversight and intervention are to be exercised. Such codification requires not only a charter or terms of reference, but also demonstrable “mandate clarity” through decision memoranda, delegated authorities, escalation rights and a governance calendar in which periodic consideration of integrity risks is structurally embedded.

A dedicated governance structure, for example through an audit and/or ethics committee, should be equipped with clear escalation rights and effective access to information, including independent insight into high-risk markets, business lines and third-party channels. It is critical that the delineation of roles between the first line (the business), the second line (risk/compliance) and the third line (internal audit) is not merely conceptual, but demonstrably effective through documented handovers, clear responsibility allocation and a practice of challenge and independent testing that operates in substance. The design should also provide for mechanisms to mitigate “management override”, by subjecting decision-making on material integrity matters to independent review, clear thresholds and auditable trails, and by instituting explicit board deep-dives for areas of heightened exposure.

Accountability is further strengthened through senior management attestations regarding compliance and control effectiveness, supported by evidence packs that do not merely contain completion statistics, but substantiate the core of operational performance: outcomes of control testing, exception trends, follow-up on alerts and documentation of corrective measures. Integrity should also be visibly integrated into performance management and executive scorecards, so that conduct and control are explicitly reflected in appraisal, remuneration and promotion decisions. A consistent and traceable consequence management framework—with consistent application, proportionality and documented decision-making—anchors the principle that integrity standards are not negotiable, while governance over exceptions (approval matrices, captured rationale and independent challenge) prevents deviations from gradually normalising into de facto standard practice. The requisite documentation discipline—minutes, decision logs and audit trails—provides the foundation for internal learnings and external defensibility.

Enterprise risk assessment and dynamic risk mapping

An evidence-based enterprise fraud and corruption risk assessment requires an explicit methodology in which scope, assessment criteria, data usage, weighting and governance around management judgement are defined in advance and endorsed at the appropriate level. The quality of a risk assessment is determined to a significant extent by the degree to which inherent risks are distinguished from residual risks, and by the consistency with which risk drivers are translated into prioritisation of controls, monitoring and assurance. A mature approach ensures that the assessment is not limited to generic statements, but is demonstrably grounded in verifiable inputs, such as transaction volumes, the nature and extent of government touchpoints, the use of intermediaries and cash intensity within specific value chains.

Dynamic risk mapping requires granularity by country, sector, customer type, product and transaction flow, so that exposure is visible at the level where decisions are taken and controls are executed. Identification of inherent risk drivers—such as procurement-sensitive spend, public sector touchpoints, the use of agents or distributors, atypical payment routes and a high degree of discretionary discounting—should result in sharply defined risk profiles that are usable for control design and monitoring. In that context, scenario analysis of typical typologies (kickbacks, procurement fraud, facilitation payments, conflicts of interest and manipulation of books and records) is essential, because such scenarios translate abstract risks into concrete vulnerabilities in processes, systems and decision-making.

Validation of risk ratings should be achieved through a combination of qualitative assessment and data analytics, for example on payments, vendor master data, approvals, overrides and exception patterns. Lessons learned from incidents, audits, complaints and whistleblowing should be systematically fed back into the risk mapping, ensuring that the model is not static and that recurrence of patterns is mitigated. The establishment of key risk indicators (KRIs) with thresholds, trends and escalation triggers creates a steerable language for management and the board, provided those indicators are linked to clear definitions, reliable data sources and unambiguous ownership for follow-up. Alignment with the compliance monitoring plan and the internal audit universe ensures that monitoring and assurance priorities logically follow from the risk assessment, while documentation of management judgement and rationale in risk scoring strengthens transparency and auditability, supported by an embedded refresh mechanism in the event of reorganisations, market entry, M&A activity or relevant regulatory developments.

Policies, standards and normative frameworks

A coherent normative framework requires codification of anti-bribery and anti-corruption (ABAC) and anti-fraud standards into a single, consistent control framework, in which definitions, prohibited conduct, minimum controls and evidence requirements are uniformly articulated. Clear definitions of direct and indirect bribery, kickbacks, facilitation payments, fraud schemes and related integrity breaches are necessary to reduce interpretative variance and enhance enforceability. This requires not only policy documents, but also a normative translation into practical standards: when pre-approval is required, what minimum documentation is necessary, which roles are authorised, and which circumstances are categorically impermissible irrespective of commercial context.

Gifts and hospitality regimes should include thresholds, pre-approvals and register obligations that are risk-based, while remaining sufficiently straightforward to support operational compliance. The normative framework for charitable donations, sponsorships and political contributions further requires due diligence, approvals, transparency and verifiable rationale, because these categories are, in practice, susceptible to reputational risk and the concealment of improper benefits. Conflicts of interest policies require periodic disclosure cycles, independent assessment and clear consequences for non-disclosure, with emphasis on preventing undue influence in procurement, sales, tender processes and partner selection.

Procurement and vendor onboarding standards should be positioned as core components of the anti-fraud control framework, given the frequent overlap between supplier relationships, kickback risk, invoice manipulation and circumvention of tender procedures. Books and records requirements must explicitly ensure accurate classification, prohibit and render detectable “slush funds” and improper marketing or consultancy bookings, and impose documentation obligations such that underlying business rationale and delivered performance remain verifiable. Contractual clauses—including ABAC representations, audit rights, termination rights, sub-agent restrictions and training obligations—form part of the normative baseline and should be aligned with disciplinary frameworks and HR procedures to ensure that sanctions and measures are applied consistently, proportionately and in a legally robust manner. Periodic policy reviews and controlled roll-out with version control and attestations ensure that the normative framework remains current and that demonstrable understanding and acceptance across the organisation are maintained.

Third-party risk management

Third-party exposure is, in many sectors, the dominant channel for bribery and fraud risk, particularly where intermediaries, agents, distributors, consultants or lobbying-type service providers are used. A risk-based due diligence model with clear tiers and minimum evidence requirements should therefore be designed as an end-to-end process, from initial selection through contracting and ongoing monitoring. Baseline requirements include identification of beneficial ownership, reputational screening and adverse media checks, complemented by verification of qualifications, actual service delivery and the plausibility of the commercial rationale. It is critical that due diligence does not devolve into a purely administrative “tick-the-box” exercise, but that findings meaningfully influence decision-making, contractual protections, payment arrangements and monitoring intensity.

A commercial rationale test is essential to assess proportionality of fees, scope and deliverables, with specific focus on red flags such as success fees without transparent performance criteria, unusually high margins, vague descriptions of services or atypical requests regarding payment routing. Contractual safeguards should include audit rights, anti-corruption undertakings, restrictions on sub-agents and clear termination triggers, enabling intervention where misconduct signals arise or transparency proves inadequate. Payment controls—such as payments only to approved bank accounts in the name of the contracting party, a prohibition on cash, requirements for invoice substantiation and restrictions on split payments—are necessary to prevent circumvention and to demonstrate transaction integrity.

Ongoing monitoring requires periodic refresh of due diligence, transaction testing and, where appropriate, site visits or management meetings, coupled with escalation paths for findings and clear ownership for remediation. Training and certification of high-risk third parties, with documented completion and content tailored to the relevant risk profile, strengthens both prevention and defensibility vis-à-vis regulators. An effective model also includes suspension and termination protocols, replacement planning and remediation measures, ensuring that commercial dependency does not result in deferral of necessary action. Integration of third-party data into fraud analytics—such as vendor master data, bank account changes, address clustering and supplier linkages—enhances detection capability, while governance over exceptions and legacy third parties secures explicit board visibility for material risks, preventing deviations from remaining outside the scope of effective oversight.

Financial controls, segregation of duties and mitigation of control override

Financial controls constitute the operational backbone of anti-fraud and ABAC, because transaction flows, master data and accounting entries are the primary carriers of both risk and evidence. Robust segregation of duties (SoD) within procurement-to-pay and order-to-cash processes should prevent any single individual or functional role from exercising end-to-end control over creation, approval, execution and reconciliation. This requires not only system roles and authorisation matrices, but also periodic role recertification, monitoring of SoD conflicts and compensating controls where full segregation is not feasible. Tightened approval matrices for high-risk spend and atypical transactions should be calibrated to materiality, risk indicators and local context, with clear escalation in the case of non-standard payment terms, accelerated payment requests or atypical contracting structures.

Vendor master governance is, in practice, a critical control, because manipulation of supplier data (bank accounts, addresses, contact details) is a common feature of fraud typologies. Dual control, change logs, periodic cleansing and independent review should be implemented with sufficient rigour to identify both unauthorised amendments and suspicious patterns at an early stage. Journal entry controls require restrictions on manual postings, supervisory review and analytics on outliers, with particular attention to period-end entries, unusual general ledger accounts and reclassifications that may indicate concealment of improper expenditure. Expense management controls—substantiation requirements, limits, exception reporting and targeted audits—reduce the scope for abuse in travel and entertainment, while treasury controls (bank account governance, dual authorisation and monitoring of unusual flows) protect the integrity of cash movements and payment instructions.

An effective exception management regime requires captured rationale, pre-defined compensating controls and escalation in the event of repeated deviations, preventing exceptions from accumulating into a parallel process outside governance. Continuous controls monitoring (CCM), supported by data-driven alerts, disciplined follow-up and evidence retention, strengthens detection capacity and provides management with an early-warning mechanism, provided alert logic is maintained and false positives are managed efficiently. Periodic operating effectiveness assessments with consistent evidence are necessary to demonstrate that controls not only exist, but also operate effectively under realistic conditions. Finally, board reporting on control failures warrants particular attention: trends, root causes and remediation milestones should be reported in a manner that enables oversight to focus not merely on incident notification, but on structural control improvements, prioritisation of corrective actions and demonstrable reduction of recurrence risk.

Incentives, conduct risk and cultural interventions

Incentive and remuneration structures largely determine actual risk behaviour within commercial processes, as targets, bonus criteria and informal recognition mechanisms concretely shape the operating context for managers and employees. An effective integrity approach therefore requires a systematic review of incentive structures for perverse incentives, with particular focus on situations in which revenue growth, margin pressure or market share is prioritised over the quality of contracting, due diligence or documentation. Relevant considerations include, among others, aggressive sales targets without explicit quality gates, bonus metrics that reward volume only, and appraisal frameworks in which “closing the deal” is implicitly valued more highly than compliance with escalation and approval requirements. A carefully designed incentive framework should ensure that the achievement of commercial objectives is structurally conditional upon demonstrable compliance with control and integrity requirements, so that the system does not reward behaviours that expose the organisation to fraud, corruption or bribery risks.

Conduct risk assessments should be integrated into business planning and commercial governance so that cultural and behavioural risks are not handled reactively, but are identified and mitigated proactively. This requires a consistent methodology whereby risky behaviours and subcultures are articulated, prioritised and translated into interventions that affect both leadership and day-to-day execution. A hallmark of a mature approach is that “soft signals”, such as unusually high pressure to accelerate approvals, recurring resistance to documentation, or informal instructions to complete due diligence “later”, are treated as relevant risk indicators and are escalated and addressed through governance channels. Such an approach also requires that integrity criteria are explicitly incorporated into promotions, performance reviews and talent management, ensuring that integrity is a visible and measurable component of personnel decision-making.

Consequence management should be applied consistently and in a seniority-neutral manner, supported by clear standards for proportionality, transparent decision-making and demonstrable equality of enforcement. A speak-up culture requires a robust non-retaliation standard, confidentiality in intake and case handling, and visible follow-up on reports, with feedback—where permissible—contributing to trust in the system. Targeted training for high-risk roles (such as sales, procurement, government-facing functions and finance) should be reinforced by leadership messaging that is frequent, specific and grounded in practical examples, so that normative expectations do not remain abstract. Periodic culture measurements and focus groups, with board-level discussion of outcomes, further provide a governance anchor for cultural interventions, while rotation and mandatory vacation policies in high-risk roles can offer additional preventive effect by disrupting dependencies, hidden arrangements and long-standing control positions. Where signals of “toxic subcultures” arise, an escalation mechanism with targeted interventions and independent monitoring is necessary to halt the normalisation of deviations in a timely manner and to demonstrate sustainable recovery.

Detection, monitoring and data-driven fraud analytics

A credible anti-fraud and ABAC programme requires detection capabilities that extend beyond periodic sampling, as fraudulent and corrupt patterns typically manifest in recurring data attributes and anomalies in transaction flows. The design of a fraud monitoring framework with clear use cases and defined coverage should therefore start from the risk profile and typologies that are relevant to the business, with explicit choices as to which processes, entities, countries and third-party channels are monitored. It is essential that monitoring is not limited to classic fraud indicators, but also targets ABAC signals such as unusual consultancy fees, atypical commissions, non-standard payment routes, and transactions linked to government-related events. A sound framework also defines data ownership, data quality requirements, retention periods, access rights and privacy or employment-law constraints, ensuring that monitoring is legally defensible and operationally workable.

Payment analytics should detect typical red flags, including round-amount payments, weekend payments, split invoices, accelerated payment processing, offshore routing and payments to non-contracted accounts. Vendor analytics should focus on bank account overlaps, address clustering, duplicate suppliers, rapid changes in master data and unusual concentrations of spend with new or low-transparency suppliers. Procurement analytics can surface signals such as single sourcing without adequate rationale, bid anomalies, spikes in change orders and threshold splitting designed to circumvent approval limits. Expense analytics should identify patterns such as out-of-policy claims, high frequency, anomalous merchants and unexplained correlations between claims behaviour and business outcomes. Where permitted and proportionate, additional attention may be given to communications red flags such as off-channel instructions, urgency language or side agreements, provided that such measures are carefully balanced against applicable privacy and employment-law frameworks and are demonstrably necessary for the intended risk purpose.

The effectiveness of monitoring is significantly shaped by alert triage procedures, including defined service levels, clear ownership, documented follow-up and quality assurance across both triage and closure. Integration with whistleblowing and hotline data strengthens trend and cluster analysis, as reports can provide context for data patterns and, conversely, data can help identify reporting themes. Periodic tuning and back-testing of detection models is necessary to minimise false negatives and to limit “alert fatigue”, ensuring that the organisation is not paralysed by high volumes of low-value signals. Reporting dashboards for management and the board should cover KRIs, case volumes, cycle times, recurrence patterns and remediation status, with sufficient granularity to enable targeted governance intervention and with consistent definitions to ensure reliable trend analysis. Demonstrable discipline in follow-up and closure, including evidence retention, is a key element of defensibility vis-à-vis supervisors and auditors.

Investigations readiness, response protocols and regulatory defensibility

Investigations readiness requires a pre-established and tested response capability, so that incidents are not handled ad hoc and fragmentarily, but in accordance with a consistent, legally robust and operationally workable protocol. The establishment of an investigation playbook should describe intake, triage, escalation and scope setting in explicit terms, including criteria for materiality, urgency, the functions involved and potential regulatory exposure. In this context, clarity of escalation governance is critical, with pre-defined thresholds for involvement of senior management and the board, and with clear role allocation between compliance, legal, HR, internal audit and IT/security. An effective playbook also addresses the quality of case file construction, ensuring that decisions on prioritisation, investigative steps, findings and closure are recorded consistently and are capable of subsequent scrutiny.

Legal hold and evidence preservation procedures are a core prerequisite for defensibility and should be operationally tested for speed, completeness and feasibility within relevant IT landscapes and cross-border environments. Interview protocols—including Upjohn-type warnings where appropriate, consistent documentation and safeguarding—should be designed to support the reliability of statements, protect rights and limit procedural vulnerabilities. Case management tooling should support logging, chain of custody, decision trails and reporting, ensuring both evidential integrity and transparency of decision-making. A privilege strategy requires cross-border mapping and controlled circulation, particularly as privilege regimes differ by jurisdiction and misapplication can lead to unintended disclosure. A mature readiness approach further includes a protocol for dawn raids and regulator requests, with a single command structure and a rapid response team, so that the initial hours are not dominated by uncertainty regarding authority, communications and document handling.

Criteria for self-reporting and voluntary disclosure should be developed in advance, including board approval thresholds, decision frameworks for timing and content, and parameters for remedial measures that can strengthen credibility with authorities. Parallel workstreams—such as audit, HR, IT security and communications—require clear role separation to avoid conflicts of interest and to prevent contamination of factual findings. Remediation-by-design implies that early control fixes may be implemented where risks are acute, without compromising fact-finding or evidential integrity, provided that actions are carefully documented and legally aligned. Post-case lessons learned should lead to concrete updates of policies and controls, supported by demonstrable implementation and verification of effectiveness, ensuring that the matter does not end with identifying misconduct but visibly results in a strengthened control environment. This cycle—from readiness through remediation—forms the foundation for regulatory defensibility and for reducing recurrence risk.

Training, attestations and third line assurance

Training and attestations are essential instruments for translating normative standards into behaviour, provided that the programme is risk-based by design and that effectiveness is measured demonstrably. Role-based training curricula should vary in depth, frequency and practical scenario content depending on risk profile and function, with specific modules for roles with heightened exposure such as sales, procurement, tender teams, government-facing functions, finance, treasury and executives. Substantively, training should not remain at the level of abstract definitions, but should focus on recognising red flags, correct application of approvals and registers, dealing with pressure or exception requests, and practical guidance on documentation and escalation. A mature learning pathway should also provide refreshers, onboarding requirements and targeted interventions in response to changes in risk profile, markets or business models, ensuring that knowledge remains current and that new exposures are addressed in a timely manner.

Certification cycles—employee attestations, third-party certifications and executive affirmations—should be structured with clear scope, definitions and evidence requirements, ensuring that attestations are not merely formalities but meaningful and controllable. Senior management attestations can be supported by structured evidence packs that provide insight into control operation, exception volumes, open issues, training completion, due diligence status and monitoring outcomes. Testing training effectiveness is necessary, for example through knowledge checks, scenario exercises and follow-up where failures occur, so that it is demonstrable that understanding is present rather than merely “attendance” being recorded. KPIs for programme effectiveness—such as completion rates, exception volumes, closure times and repeat issues—should be reported using consistent definitions and linked to governance actions, ensuring that metrics drive recalibration rather than cosmetic reporting.

Third line assurance, in particular internal audit coverage of ABAC/anti-fraud controls, should be planned on a risk basis and aligned to the risk assessment and monitoring findings, ensuring that assurance is deployed where exposure and signals are highest. Independent compliance testing—transaction testing, control walkthroughs and thematic reviews—strengthens second-line challenge and provides additional evidential support for operational effectiveness. Evidence retention requires auditable records of training, approvals, due diligence and monitoring, with attention to traceability, access governance and retention periods. Board assurance packs should provide a summary with underlying evidence and management responses, ensuring that oversight does not depend on high-level narratives but is grounded in verifiable substantiation. Continuous improvement through periodic maturity assessments and benchmarking, where appropriate, supports a demonstrable development trajectory and shows that the programme adapts to new typologies, technological developments and regulatory expectations.

Integration with M&A, joint ventures and post-deal remediation

M&A, joint ventures and other forms of structural collaboration create specific integrity risks, as historical conduct, legacy controls and local practices can expose an acquirer or investor to inherited liabilities and reputational damage. Pre-acquisition ABAC/fraud due diligence should therefore be designed on a risk basis, with particular focus on high-risk geographies, third-party relationships, government-related revenue, unusual payments and the quality of books and records. An effective due diligence approach includes not only document review, but also targeted interviews, analysis of payment flows, assessment of vendor master data, and identification of red flags such as disproportionate commissions, unclear consultancy services or limited documentation for marketing- or facilitation-type expenditures. Where signals exist, a forensic review of suspect payments and books and records may be necessary to quantify the nature and scale of potential exposure and to address risks appropriately within deal structuring and integration planning.

Deal structuring should include appropriate contractual protections, including representations and warranties, indemnities, conditions precedent and audit rights, so that risks are not merely absorbed but are mitigated and controlled contractually. A 100-day compliance integration plan should cover policy harmonisation, training and control alignment, with clear deliverables, deadlines, ownership and reporting, so that integration does not become an open-ended exercise. Screening and rationalisation of legacy third parties and consultants is typically a core priority, as third-party networks often represent the primary channel for bribery and fraud risks and legacy contracts frequently contain gaps in audit rights, sub-agent restrictions and payment controls. Joint venture governance requires clear control rights, reporting, audit mechanisms and escalation, ensuring that integrity incidents are not frustrated by limited access to information or governance impasses between partners.

Post-deal monitoring and assurance—such as through thematic testing and board visibility—are necessary to verify that integration measures have not only been implemented but also operate effectively in practice. Remediation of cultural and incentive issues in acquired entities merits particular attention, as local norms and historical commercial pressure points often continue to influence behaviour post-closing unless addressed through targeted interventions, including leadership messaging, HR processes, incentive redesign and consequence management. Voluntary disclosure assessments upon discovery of historical misconduct should be performed against pre-defined criteria, with explicit governance decision-making on timing, scope and remediation substantiation. Documentation of integration actions is essential to support mitigating arguments vis-à-vis authorities, financiers and auditors, as the ability to evidence rapid, proportionate and effective remediation in practice may be a relevant factor in the assessment of culpability, sanctioning and supervisory expectations.