Experience shows that many companies do not include their business partners in their compliance program. This is a highly risky omission.
Legal provisions such as the Commercial Code or stock corporation law stipulate that companies, as well as individual bodies and employees, can be held liable for the unlawful conduct of business or contractual partners.
A practical example illustrates the fundamental problem: a company uses external sales partners who are remunerated on a commission basis. Their earnings therefore depend on the sales they generate. If a sales partner engages in fraudulent activities to successfully broker deals—such as bribing a potential client—the business partner's behavior reflects on the company, even if the company itself has not acted unlawfully. The company faces financial and criminal consequences as well as a significant loss of reputation.
Business partners are often not included
Many companies are inadequately prepared for this risk. The study "Compliance Management – the Business Challenge" by AGAMON Consulting GmbH (www.agamon-consulting.de) highlights the shortcomings of medium-sized companies in this area. In the majority of the companies surveyed, their compliance programs are aimed 100% at managers and employees. Suppliers and subcontractors are included at around 75%, while business partners are only considered at around 25%. It is well known that external parties are at least involved in around half of all economic crimes.
A frequently underestimated risk
The risks that can arise from business partners such as intermediaries, negotiators, and consultants should not be underestimated. Their compliance violations can lead to fines and claims for damages. Further consequences can range from exclusion from public contracts to criminal prosecution. Companies jeopardize their image and reputation if they do not select their partners carefully.
The compliance program of every company should therefore definitely include business partner compliance management as part of a holistic approach.
Eckart Achauer
Studied law and business administration, postgraduate studies leading to a Master of Business Administration (MBA). In-service training to become a European Quality Manager (DGQ), a mediator specializing in business mediation, and a Certified Compliance Manager (TÜV).
Eckart Achauer worked for around 10 years in the international insurance industry in various management positions at a Swiss insurance group (claims department, sales, assistance) before moving into management and management consulting in 1997.
As a consultant and managing director of various consulting firms, Mr. Achauer has specialized in organizational and process optimization as well as the development and implementation of management systems—quality management, risk and compliance management.
Mr. Achauer is responsible for compliance management at HR Consult Group. As part of compliance audits, he analyzes their organizational "compliance fitness," raises awareness and trains management, executives, and employees, and supports companies in setting up and implementing individual compliance management systems. In doing so, he always takes into account the specific risk situation of the companies. Thanks to his many years of experience as a manager and consultant, he is very familiar with the practical challenges of business.
About the author
Eckart Achauer, studied law and business administration, postgraduate studies leading to a Master of Business Administration (MBA). In-service training as a European Quality Manager (DGQ), mediator specializing in business mediation, and Certified Compliance Manager (TÜV).
He worked for around 10 years in the international insurance industry in various management positions at a Swiss insurance group (claims department, sales, assistance) before moving into management and business consulting in 1997.
As a consultant and managing director of various consulting firms, Mr. Achauer has specialized in organizational and process optimization as well as the development and implementation of management systems—quality management, risk and compliance management.
At Senator Executive Search Partners, Mr. Achauer is responsible for compliance management. As part of compliance audits, he analyzes their organizational "compliance fitness," raises awareness and trains management, executives, and employees, and supports companies in setting up and implementing individual compliance management systems. In doing so, he always takes into account the specific risk situation of the companies. Thanks to his many years of experience as a manager and consultant, he is very familiar with the practical challenges of business.
