THAILAND Trends and Developments Contributed by: Nam-Ake Lekfuangfu, Theeranit Pongpanarat, Praween Chantanakomes and Panitan Pruksakasemsuk, Baker McKenzie
Baker McKenzie 195 One Bangkok Tower 4 30th-33rd Floors, Wireless Road Lumphini Pathum Wan Bangkok 10330 Thailand
Tel: +66 (0) 2636 2000 Fax: +66 (0) 2636 2111 Email: Bangkok.Info@bakermckenzie.com Web: www.bakermckenzie.com
Corporate Investigation Trends in Thailand Many companies today are significantly strengthen - ing how they manage investigations and employment actions related to corruption, fraud and compliance breaches, including financial or procurement fraud, conflicts of interest, bribery, breach of internal poli - cies, etc. As has been seen in recent years, these mat - ters are usually not isolated incidents, but frequently present serious and systemic risks not only to the organisation but also to reputation and people. Key challenges include the following. Expectations from the relevant stakeholders Regulators, boards of directors, investors and employ - ees – and sometimes the public – now expect compa - nies to respond to allegations quickly, fairly and trans - parently. A failure to act decisively can exacerbate the underlying issues and trigger increasing public and government scrutiny as well as additional compliance issues, exposing companies to regulatory sanctions, litigation and reputational harm. Corporate cultures may pose significant risks Serious incidents can often largely be attributed to the lack of a solid corporate culture that reinforces proper and timely compliance. This can result in a lack of accountability (eg, shifting the blame or blindly follow - ing past but improper practices or orders from superi - ors) and a bystander culture (eg, “I am not responsible for that and I will just keep my mouth shut”).
Such cultural weaknesses often manifest in: • reluctance by employees to voice concerns; • a lack of proper oversight and supervision; and • a lack of understanding of the importance of com - pliance and its implications, as well as persistent improper practices, notwithstanding violation of the established rules and procedures. All of these undermine the effectiveness of a com - pliance culture and increase exposure to regulatory, litigation and broader organisational risks. These cultural issues can also worsen existing but often small issues (if they occur in isolation), which can cause significant, persistent and systemic risk within the organisation if they are not properly addressed in a timely manner. Lack of proper internal control Fraud, corruption and compliance issues can some - times be linked to the lack of proper internal controls, such as the proper segregation of duties, proper train - ing and proper checks and balances. Insufficient or poorly designed internal controls often allow fraud, corruption and compliance violations to thrive and go undetected or unaddressed, creating vulnerabilities that can be exploited by individuals or groups within the organisation. When internal control frameworks are lacking, organisations may also struggle to iden - tify irregularities in financial transactions, procurement processes or other critical operations, increasing both the likelihood and impact of breaches.
408 CHAMBERS.COM
Powered by FlippingBook