We are once again reminded in the media of the importance of knowing who we choose to do business with and what consequences this can have for us as individuals as well as the company that we run or work for.
It is not only of interest to know who we choose to do business with and who are behind these said companies. It is also a fact that under certain circumstances we are bound by the law to take preventive actions as well as perform certain controls. Larger companies are increasingly putting higher demand on their business partners, often smaller companies, that they and their own business partners have a high ethical standard.
It is per se a good quality to have confidence in our business environment and our business partners as well as trusting their intentions. Sadly, it may prove that there is a hidden agenda, without much transparency. The company’s public face might show a complete different image that what is really the case.
In todays globalized world and cyber space it is not always easy to determine our business partners’ ethical standard, and their business partners as well as potential shell companies. The risk exposure is more and more complex as there is a higher risk for corruption, fraud, money laundry or terror financing.
Can we rely on luck and hope that we do not become victims, or could it actually be a criminal offense to be unlucky? Ignorance is not a viable defense.
It is of upmost importance to know what rules and regulations that apply and what is expected of us. By a risk-based approach we can use our resources where we see the biggest risks, do what is expected of us, such as various background checks and preventive actions. The commercial upside of these activities should not be underrated.
This is the dilemma we may be faced with:
Should be choose to refrain from utilizing resources to perform background checks and preventive actions to save costs in a short-term perspective? This can see beneficial even-though we assume that there are certain irregularities and if we do not do the deal maybe some competitor will do it instead?
What is your ethical compass telling you and how do you choose to act?