Compliance - Guarantor of good governanace

Compliance - Guarantor of good governanace

JOZO KNEZ, Lider media | September 27, 2019

According to Drago Kos, the President of the OECD Anti-Corruption Task Force, the highlight of the fight against corruption in Croatia happened on the day we joined the European Union. - After that, the fight begins to subside as pressure from the Union disappears - Kos deducted in the panel 'Compliance - Safe Business Guarantee' organized by the Institute for Compliance, Criminal Compliance and Anti Money Laundering (ICCrA) and Lider Business Weekly magazine last week, and with the financial support of the City of Zagreb and the sponsorship of the Croatian Chamber of Commerce held at Press Center in Zagreb.

National interest

The introduction to the session was a lecture delivered by MSc. Davor Iljkić, the president and founder ICCrA, who emphasized that its institute is committed to the introduction of compliance officers into state-owned enterprises because it is an excellent anti-corruption measure. We hope that the Government will make a decision which will make 'compliance officers' mandatory in corporations because we consider the latter a national interest. His role is to be the guarantor of the entire corporation and to represent employees both internally and externally - said Iljkić, who in his lecture, gave a cross-section of compliance from the beginning to the present day.

He explained that nowadays a compliance officer must be close to the administration he advises, but that its function is completely independent. If such an officer existed in Agrokor or Uljanik, what happened to these companies might have been avoided- Iljkić shared his reasoning. The panel hosted a round table discussion attended by the chairwoman of the Conflict of Interest Commission Nataša Novaković, Secretary General of the Croatian National Committee of the International Chamber of Commerce (ICC Croatia) Sunčanica Skupnjak Kapić, Zorica Palac from EY's Forensic Services Department and economist Ph.D. Damir Novotny and Drago Kos, moderated by Davor Iljkić.

Iljkić opened the debate by asking why the Conflict of Interest Commission has a bad reputation in public and why it is perceived to be corrupt, to which Novaković replied it was due to the lack of state support. If your superiors don’t support behaviour which is in accordance with the law and ethical principles, you have a problem. However, we fight against the latter. The fines are up to forty thousand kunas, but that did not help the officials to act in accordance with the law - explained Novaković, adding that Croatian policy towards the Comission is rather disappointing. Sunčanica Skupnjak Kapić presented the work of ICCrA, which promotes a culture of integrity and transparent business and emphasized that companies with compliance programs are achieving better business results, attracting investors and a quality workforce more easily. When asked what she considers as bribe Zorica Palac answered that were all offerings or gifts are critical. Asked to comment on the gray economy in Croatia, Novotny said he believed the entire region was an area of gray economy and that tax repression was not the best way to deal with it. As an example of tax repression, he mentioned fiscalisation which did not reduce the gray economy.

Better outcomes of doing bussines

Drago Kos gave a lecture on the cost-effectiveness of introducing compliance system, stating that proper implementation brings as much as twenty percent more profit, has 12 percent lower labour costs, and the owners earn 5.8 percent more profit based on their ownership. When talking about corruption, he explained in the lecture, that the first prerequisite for reducing corruption is increasing confidence. The second lecture on “Effective implementation of the compliance programme“ was delivered by Ferenc Bureau of EY Forensic Service Department. He concluded that, above all, compliance bust be commonplace in all management policies, that it should be based on risk analysis and rest on the sound organisation of the compliance system.

'Compliance officer' in state-owned companies is an excellent measure against corruption

The sponsors of the event were Janaf, King ICT, EY, Hilton and Hotel ’I’.

Check out the event photo gallery