Driven by the mass globalization of business, the U.S. government is continuing to speed up its enforcement of the Foreign Corrupt Practices Act. Besides the greater compliance and legal risks to companies that the increased FCPA activity represents, it also presents the likelihood that CFOs will face mounting personal liabilities, experts say.
The number of FCPA actions against individual executives is shooting up. The average number of such proceedings launched was 6 per year from 2002 to 2005, 14 annually from 2006 to 2008, and 13 in just the first six months of 2009, says PricewaterhouseCoopers.
For their part, CFOs should be especially concerned about the stepped-up enforcement because they are "signing off on certifications saying that their financial reports are truthful and accurate," says Wendy Wysong, a partner at law firm Clifford Chance, referring to CFOs' personal liability for honest corporate reporting under the Sarbanes-Oxley Act. "And the compliance function is often within the CFO's responsibilities, which should be another huge concern."
