Integrity Compliance, in essence, is a set of standards imbedded in a company’s values for the purpose of ensuring the ethical and fair execution of business practices. The addition of integrity compliance within a company’s overall business policies can also help maintain healthy third party relationships. While integrity compliance policies focus on internal controls, it is just as important to focus on these third party relationships. Internal behavior is much more manageable than the actions of external parties—those with which the company decides to foster business relationships. This is why including third party integrity compliance principles can be helpful in making sure your company is dealing with the best of people (and that the relationship remains mutually beneficial).
Porter & Hedges, LLP makes an excellent case for the inclusion of third party behavior clauses:
“The company must communicate its ethical standards and values expressly to third-party partners. Contracts with such partners should include reference to the company’s integrity compliance program, audit rights, and provision for termination if that partner is found to have violated such standards. There must also be ongoing monitoring of the relationship, […], audit rights, and proper internal controls to monitor the payments made to those third-parties.”
As described, it is imperative a company communicate their own values and expectations when partnering with a third party. Doing so can help make sure they are choosing the most beneficial partner, who will respect the mentioned values.
The above excerpt also highlights the opportunity for Foreign Exchange Rate Integrity® to be included within a company’s integrity compliance principles. FX Rate Integrity® provides assurance for businesses dealing with foreign currencies—specifically in bank negotiations. A company should explicitly list their expectations, standards, and goals in the third party section of their integrity compliance principles. Ideally, the company can use FXRI® service to make sure their appointed bank is keeping up with integrity compliance standards (and continues to do so throughout the duration of the partnership). FXRI® can alert a company in the event a bank has “violated such standards”. Additionally, FXRI® clients are encouraged to consider FXRI® auditing after one year—this supplement can be likened to the “ongoing monitoring” mentioned in the excerpt above.
-Paola Gasca, Blades International, Inc. Analyst