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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Business Ethics, Code of Conduct and Anti-Bribery

A listed company's Board is reviewing its anti-bribery framework after a vendor's representative promised a gift to a licensing officer to secure the company's renewal. Which Board step best aligns with the Section 9 defence?

The Board should put in place and document adequate procedures, aligned with guidelines prescribed by the Central Government, covering all persons associated with the company, including vendors and agents. Such procedures are the basis of the statutory defence, while assurances or narrow policies do not provide it.

  1. ARely on the vendor's assurance that it will not bribe anyone
  2. BRemove all references to vendors from the policy since they are not employees
  3. CPut in place and document adequate procedures, per the guidelines prescribed by the Central Government, to prevent all associated persons from bribing public servantsCorrect
  4. DAssume liability arises only when the company's directors personally pay the bribe

Explanation

Section 9 liability arises through any associated person, including vendors performing services for the company. The defence needs adequate procedures in compliance with prescribed guidelines, and Section 9(5) empowers the Central Government to prescribe them. Hence documented procedures covering all associated persons are the sound step.

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