Recently we had the opportunity to sit down with Sean Hughes, Chief Risk & Legal Officer at UniSuper and member of the Ethical Alliance Advisory Council, to hear his thoughts on anti-corruption and compliance issues and his hopes for the Ethical Alliance in 2016.
Sean, tell us more about your background and how you started your career.
I started my professional career as a litigation lawyer, initially working on corporate collapses in the UK, Europe, Middle East and then in Asia. After I moved to Australia, I joined the Australian Securities and Investments Commission (ASIC) where I led enforcement and compliance activities in financial services. Between 2010 and 2013 I was fortunate to have the opportunity to establish and lead a new regulator as CEO (the Financial Markets Authority of New Zealand). I have also led risk management and legal functions at 3 of Australia’s largest financial services firms. So I’ve had just over 25 years’ experience working on some really interesting and complex issues, some of which have involved quite serious misconduct.
What makes you passionate about anti-bribery, anti-corruption and compliance?
I think that leaders have responsibilities which go far beyond their formal performance targets to meet shareholder, customer, employee and other expectations. Leadership means we stand for a model of behaviour and conduct that others can judge us by. Many leaders (and companies) claim that their values include “transparency, honesty and integrity”. Yet bribery, corruption, misconduct and other abuses are the very opposite of those standards. Bribery and corruption in particular necessarily entail behaviour and information which is hidden or suppressed from view. So it’s the leaders’ hypocrisy and the dishonesty of these abuses which I find to be offensive.
What about the Ethical Alliance excites you?
I was honoured to be approached to join the Ethical Alliance Advisory Council. When I researched the work that the Ethical Alliance was doing, alongside the calibre of its personnel and the other Council members, I was really impressed with the experience and commitment of this team. It’s not always easy to take a stand publicly against behaviours and standards that many accept are just a way of life. It’s a fact that many commentators and advisers privately acknowledge that some form of bribery and corruption is just a necessary means to get some business deals done. I’m impressed that the Ethical Alliance and its people work hard to shine the light on these practices and expose the risks and impacts they create.
What do you think is the biggest area of concern or danger for anti-bribery and corruption professionals in the year ahead?
It’s not just an immediate issue, but there is always an ongoing challenge for professionals in this sector to gain both visibility and support for their efforts. In my experience as a regulator, the attention which is given to compliance programs and resourcing is directly referable and proportionate to the scale and significance of law enforcement and media attention. So when some companies are facing bribery and corruption allegations or regulatory sanctions, then others will sit up, pay attention and ask themselves the question: how are we doing? But if Boards and senior management think that bribery and corruption risks are remote, then inevitably preventative compliance programs will gain less traction and support.
Is there a specific anti-corruption initiative in the last 5 years that you find particularly inspiring due to the change it may have helped create?
I think the procedures and guidelines underpinning the UK Bribery Act 2010 have been well-delivered and the principles have been well-explained. Legislative and regulatory implementation and communication is a notoriously difficult challenge for public officials and I think the British regime has been effectively managed. In particular, I value the fact that it is tailored and proportionate, while being supported by good guidance.
(See here: https://www.justice.gov.uk/downloads/legislation/bribery-act-2010-guidance.pdf)
What do you think is essential to an effective anti-bribery and corruption framework?
At a global and national level, frameworks need to be tailored to the sector and geographies in which they are intended to operate. The obligations need to be precise, effective and agreed by those who must comply. There needs to be an effective and transparent enforcement mechanism with meaningful and proportionate consequences. For companies and other businesses, their own frameworks must align with the relevant global or national framework, but must also use concrete, tailored comprehensible language, concepts and performance measures which all employees and contractors can understand and commit to.
What do you see as the most important step business leaders can take to improve their organisation’s corruption risk management framework?
Ownership! Business leaders who pass this topic off as just another compliance obligation and more costly bureaucratic red-tape, will never generate a culture in which compliance is taken seriously or valued. You cannot expect of others, that which you do not practise yourself. Employees and contractors look carefully at their leaders to see if their actions, behaviours and language are congruent with the company’s framework and policies. If there are inconsistencies or special exceptions for a favoured few, then compliance may be viewed as optional and insignificant.
What are you reading at the moment?
I have an eclectic range of reading material which varies from news and public affairs (we have a Federal Election underway in Australia at the time of this interview) to biographies and crime thrillers! And yes, I have read quite a few real-life accounts of corruption and bribery. I’ve put those in the Horror section of my library.
If you had one message for our Ethical Alliance members, what would it be?
Resilience! Advocacy around anti-bribery and corruption is not easy and can lead to uncomfortable and even disadvantageous outcomes for members personally. I admire those who have the courage of their own values and beliefs to take a stand against this kind of misconduct, especially in environments where it may be seen as tolerated or even acceptable. Resilience and courage are essential foundations for anyone who takes on this challenge. It all starts with individuals who take a stand, and before too long these disparate individuals can find a voice, and that voice can become a force for change.