2. THE CORPORATE BUSINESS COMMUNITY
Section 2.5 - Financial Integrity 3
Principles
2.5.P.1
The company insists on honesty and integrity in all aspects of its business,
wherever business is conducted.
2.5.P.2
The company does not offer, pay, solicit or accept bribes in any form.
2.5.P.3
The company is committed to transparency in all its accounting and financial
reporting statements and communications with shareholders through its compliance
with independent auditing and financial reporting principles.
2.5.P.4
The financial services and lending practices instituted by the financial institution
include investment in the infrastructure and social development of all the
communities where they have a presence and an impact.
2.5.P.5
The financial institution recognizes that it is the responsibility of management
to prevent the use of its worldwide operations for criminal purposes.
2.5.P.6
The company acknowledges that in order for socially responsible investment
to take place that it must adhere to the following principles:
- respect for the integrity of creation
- that socially responsible investment is based on human and community needs
- that it consults with relevant stakeholders
- and, that it abides by the recommendations of these stakeholder groups.
Criteria
2.5.C.1
All transactions on behalf of the company are appropriately described in the
accounts of the company in accordance with established procedures and are
subject to audit.
2.5.C.2
All employees are required to avoid conflicts of interest between their private
financial activities and their part in the conduct of company business.
2.5.C.3
The companyís financial reporting policies, procedures and practices
ensure that the financial position of the company is fully disclosed to all
stakeholders.
2.5.C.4
The financial institution has clearly stated policies and practices to promote
community reinvestment schemes that include provision for the full range of
financial services to the local communities in which they operate or upon
which they have an impact.
2.5.C.5
The financial institution has clear policies, controls and due diligence practices,
which ensure that the source of wealth and funds of clients can be reasonably
established to be legitimate. 4
2.5.C.6
The company ensures that socially responsible initiatives are decided upon
and agreed by all stakeholders, that the consultation process is inclusive
and exhaustive, and that only jointly agreed socially responsible investment
is implemented.
Bench Marks
2.5.B.1
As part of their reporting responsibilities, the company's auditors indicate
the amount of any consultancy fees incurred, and/or commission payments made,
in respect of any contract and the percentage which these fees bear to the
total gross value of such contract.
2.5.B.2
The senior administrative officer of each significant unit of the company,
as well as the company Chief Executive Officer, is required annually to sign
a letter containing the following representations:
- that neither the company (unit) nor any of its authorized representatives has been party to the offering, paying or receiving of bribes
- that no payments have been made which knowingly violate the laws of the countries in which the company operates
- that no receipts or payments of monies or other assets derived from the company (unit) have been either unrecorded or falsified when described in the relevant books and records and no other improper accounting practice has been adopted in the period under review.
2.5.B.3
The companyís directors and senior management certify in writing the
veracity of all financial statements, and fully disclose and publicly report
the financial standing of the company in an understandable manner.
2.5.B.4
Financial services, including micro-financing, discounted loan services and
other fair lending practices are made available to local communities, including
those under-served, on a fair and equitable basis. (e.g. financial institutions
can reduce interest on loans, reduce profit margins and avoid predatory lending
practices.)
2.5.B.5
The financial institution establishes an adequately staffed and independent
department, which regularly reviews client activities and tracks and reports
any unusual or suspicious activities to the proper authorities that any alleged
criminal activity can be appropriately addressed.
2.5.B.6
The company keeps a record of all socially responsible investment initiatives,
and reports them in the companyís annual report in order that stakeholders
may verify this report. In addition, twice-yearly reports shall be given to
stakeholders on ideas, work in progress and impact assessment of these initiatives.
3 In 2001/2002 the finance industry was under review in regard to auditing practices relating to the financial integrity and accountability of companies in the light of a string of corporate collapses in several jurisdictions. Reforms, some more comprehensive than others, are anticipated. Reference should be made to these legislative and regulatory changes, and the several proposals calling for universal accounting standards.
4 See the Global Anti-Money-Laundering Guidelines for Private Banking Wolfsberg AML Principles at www.wolfsberg-principles.com