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ACCA Applied Skills · Corporate and Business Law (Global) · Fraudulent and criminal behaviour

Brava Co's sales manager, a junior employee with no role in company policy, bribes a foreign official without the knowledge of the board. Brava Co had no anti-bribery procedures. In a jurisdiction with a statutory offence of failing to prevent bribery by associated persons, what is the most likely outcome for Brava Co?

Brava Co is likely liable for failing to prevent bribery, because such offences attach to the company when an associated person bribes for its benefit, regardless of board knowledge. Its only defence is proving adequate procedures, and it had none.

  1. ANo liability, because the board did not know and the employee was not a directing mind
  2. BLiability for failing to prevent bribery, unless it can show it had adequate prevention proceduresCorrect
  3. CLiability only if the board later ratified the bribe
  4. DLiability only if the official actually granted the contract

Explanation

Failure-to-prevent offences do not require the board's knowledge or that the employee be a directing mind. The company is liable unless it proves it had adequate procedures. Brava had none, so the defence fails. Ratification or success of the bribe is not required.

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