Cross-border business risks


“Globalisation and the global value chain continue to create opportunities for companies to grow and expand into new regions, with accompanying procurement and hiring practices needs. Companies today have access to suppliers worldwide as well as global talent pools from which to source desired skills to bulk up their workforce,” says Francois van der Merwe, Head of Global Screening, Managed Integrity Evaluation (MIE).

A study released by Finaccord in 2017 indicates that based on trends, the number of multinationals worldwide is projected to reach 13 900 by 2021. Linked to this, the number of expatriate employees or corporate transferees within these enterprises is projected to exceed one million by this time.
A further report by Finaccord on global expatriates, highlights that the total number of expatriates in the world market reached 56.8 million in 2017.
Applicable country
Francois believes these numbers indicate that companies and individuals are indeed moving across borders like never before. “However, companies need to be vigilant in their procurement and human resources processes and practices. Appropriate background screening and vetting therefore remains critical. Supplier and employee candidates should be screened irrespective of where they are from, and be screened based on the credentials of the applicable country.
“If we look at Africa, for example, the continent is increasingly being recognised by multinational companies as a land of opportunity, both for companies who are looking to diversify or expand their operations, and those who seek to attract talent from new markets. Similarly, rapidly growing industries and companies across Africa offer meaningful career growth opportunities for professionals from all over the world,” adds Francois. “While previously it was thought a near impossible task to conduct thorough background checks for Africa, the background screening industry has caught up with other industries on the continent.”
Although most countries, around the world and in Africa, have legislation relating to personal privacy, human rights and employment, currently there is insufficient industry specific and cross-border legislation to regulate and support background screening. In addition, there are distinct differences in the regulatory and legal landscapes between different countries. This does present some challenges and complexities to the legal obligations of conducting thorough background checks across borders.
“Understanding the differences in the legal landscapes, and knowing how to navigate these, is crucial to avoid any negligent-hiring lawsuits, penalties or hefty fines. The key to overcoming the complexities when appointing a partner or supplier, or hiring across borders, is that a company must have a global screening programme. “They should partner with a reputable service provider that works in, and has entrenched knowledge of, global markets as well as offers added assurance that all checks are conducted thoroughly, in a legitimate and compliant manner,” Francois concludes