| Wed 21 Nov 2018, 10:53 | | Companies And Intellectual Property Commission (CIPC) - Guideline for Corporate Compliance Programme - Guideline 1 of 2018 |
|
CIPC 201811210031A
Guideline for Corporate Compliance Programme - Guideline 1 of 2018
Companies and Intellectual Property Commission
GUIDELINE 1 OF 2018
GUIDELINE FOR CORPORATE COMPLIANCE PROGRAMME
1. This Guideline is issued in terms of Regulation 4 of the Companies Regulations 2011 and is addressed to
the Social and Ethics Committees of every state owned company; every listed public company and any
other company that has in any two of the previous five years, scored above 500 points in terms of
Regulation 26(2).
2. Regulation 43(5)(a)(i)(bb) states that a Social and Ethics Committee has inter alia the following functions:
2.1 To monitor the company’s activities, having regard to any relevant legislation, other legal requirements or
prevailing codes of best practice, with regard to matters relating to social and economic development,
including the company’s standing in terms of the goals and purposes of the Organisation For Economic
Cooperation and Development ("OECD") recommendations regarding corruption.
3. Section 188 (2)(a) of the Companies Act No. 71 of 2008 (as amended) ("Act") states that the Companies
and Intellectual Property Commission ("CIPC") must increase knowledge of the nature and dynamics of
company law, and promote public awareness of company law matters by implementing information
measures to develop public awareness of the provisions of this Act, and in particular to advance the
purposes of this Act.
4. Regulation 4(2) allows for the CIPC, to issue Guidelines at any time on the CIPC’s website. Regulation
4(1) defines Guideline to mean a document issued by a regulatory agency with respect to a matter within
its authority, which sets out recommended procedures, standards or forms reflecting that regulatory
agency’s advice as to what constitutes best practice on a matter.
1
5. The Social and Ethics Committee of a company should identify and evaluate the corruption risks that its
employees or others acting on its behalf are likely to encounter and use this knowledge as a basis for
developing appropriate measures to reduce these risks. The risk evaluation should take into account the
nature of the company’s business, including the sectors and markets in which it operates, and should be
revisited as the company’s business changes, expands or develops.
6. Best practice indicates that an effective method to achieve compliance with Regulation 43(5)(a)(i)(bb)
would be for a company to implement a Corporate Compliance Programme.
7. To assist companies in crafting an effective Corporate Compliance Programme the CIPC sets out the
following guidance on minimum Compliance Principals that should be incorporated into a Compliance
Programme, specifically:
7.1 TOP MANAGEMENT COMMITMENT
There must be commitment from the top management structure of the company to the company’s
corporate compliance programme and the programme must be clearly communicated to all levels of
management, the workforce and any relevant external stakeholders. Senior management should
establish a culture in which corruption is never acceptable. There must be the appointment of properly
resourced and independent compliance officers and there must be disciplinary procedures in relation to
corruption.
7.2 CLEAR, PRACTICAL, POLICIES AND PROCEDURES
There must be clear, practical and accessible policies and procedures to prevent corruption and these
should be known to all directors, officers, and levels of employees and, where necessary and appropriate,
outside parties acting on behalf of the company, including but not limited to, agents and intermediaries,
consultants, representatives, distributors, teaming partners, contractors and suppliers, consortia, and joint
venture partners.
7.2.1 Standards and procedures should include policies governing:
7.2.1.1 Gifts;
7.2.1.2 Hospitality, entertainment, and expenses;
7.2.1.3 Customer travel;
7.2.1.4 Political contributions;
7.2.1.5 Charitable donations and sponsorships;
7.2.1.6 Facilitation payments; and
7.2.1.7 Solicitation and extortion.
2
7.3 COMMUNICATION AND TRAINING
Communication and training must be provided and these mechanisms should include: (a) periodic training
for all directors, officers, and employees, and, where necessary and appropriate, agents and business
partners; and (b) annual certifications by all such directors, officers, and relevant employees, and, where
necessary and appropriate, agents, and business partners, certifying compliance with the training
requirements.
7.4 PERIODIC REVIEWS
The company must undertake periodic reviews and testing of the compliance programme in order to
evaluate and improve its effectiveness in preventing and detecting violations of anti-corruption laws,
taking into account relevant developments in the field and evolving international and industry standards.
This may require financial monitoring and internal audit procedures, as well as internal reporting
mechanisms ("hotlines") for employees and others to report concerns about potential policy violations.
7.5 DUE DILIGENCE
The company must know who they are doing business with, and assure itself that business relationships
are transparent and ethical. This requires appropriate efforts to identify and address the risks of
corruption in these relationships, particularly those with its agents, intermediaries, and business
partners. Furthermore the company must inform agents and business partners of its commitment to
abiding by laws on the prohibitions against corruption and of ethics and compliance standards and
procedures or other measures for preventing and detecting such corruption and seek a reciprocal
commitment from agents and business partners.
7.6 AUDITING AND ACCOUNTING CONTROLS
The company must have a clear and concise accounting policy that prohibits off-the-books accounts or
inadequately identified transactions. The company must monitor its accounts for inaccuracies and for
ambiguous or deceptive bookkeeping entries that may disguise illegal payments made by or on behalf of
a company.
Yours sincerely
ADV. RORY VOLLER
CIPC COMMISSIONER
19 NOVEMBER 2018
3
Date: 21/11/2018 10:53:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
