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 company's 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 company's 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 company's 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