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12/19/2012
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New Report Highlighting Risks Of Intellectual Property Theft And Corruption In Supply Chains

Report identifies challenges for global companies

NEW YORK, Dec. 19, 2012 /PRNewswire/ -- The Conference Board today launched a new research report - Safeguarding Intellectual Property and Addressing Corruption in the Global Supply Chain - which presents insights gleaned from a Research Working Group, in which The Conference Board partnered with executives from multinational companies including DuPont, Microsoft, ARAMARK, Emerson, TE Connectivity, Rockwell Automation, Siemens, and others as well as other companies, nonprofit organizations and law firms. The report also reflects key findings from a major benchmarking survey of Intellectual Property (IP) and compliance attorneys at leading firms worldwide, with respondents representing 55 Fortune 500 and Fortune Global 500 companies.

The report identifies challenges for global companies and outlines recommendations for reducing IP theft and corruption in global supply chain and business networks. The key findings include:

-- Significant risk of IP infringement and corruption throughout the supply chain. Roughly half of the executives surveyed perceived extensive risk of IP infringement in emerging markets when engaging suppliers (43 percent) and when engaging agents/business partners (48 percent). Executives surveyed also believe their companies face extensive risk of corrupt activities when engaging agents/business partners in emerging markets (70 percent) and a smaller but significant number felt there was extensive risk when engaging suppliers (46 percent).

-- Theft of trade secrets presents the greatest IP risk. Roughly two-thirds of the executives surveyed felt theft of trade secrets presents extensive risk in emerging markets, while only 36 percent rated their companies' compliance program as very effective in managing these risks.

-- Business solutions more effective in IP violations than lawsuits. Of the executives surveyed, 51 percent indicated that business solutions were very effective in addressing IP violations in emerging markets. This compares to 30 percent for lawsuits in local courts; and 27 percent for other enforcement procedures.

-- Benefits of training employees on compliance responsibilities. Roughly one-third of executives surveyed felt that training company employees is very effective for IP compliance and roughly 40 percent rated it as very effective for anti-corruption compliance. On the other hand, few companies train the employees of their third parties, instead expecting their third parties to provide such training.

-- Interest in an independent certification program. Eight-five percent of the executives surveyed said an independent program that would certify third parties on the strength of their IP compliance procedures would be helpful, including 62 percent who felt it would be very helpful. Independent certification programs for IP compliance and for anti-corruption compliance would provide valuable information to multinational companies when engaging third parties and could also provide a competitive advantage to third parties who have been certified. Programs of this type are being developed by CREATe.org and the Business Software Alliance (BSA).

-- Importance of gaining visibility into subcontractors to third parties. Companies have little visibility and even less control into the business practices of the subcontractors to their third parties. The issue most often rated as very challenging by the executives surveyed was ensuring appropriate behavior of subcontractors to your third parties (52 percent for IP protection and 46 percent for anti-corruption). For the Research Working Group, The Conference Board partnered with the Center for Responsible Enterprise and Trade (CREATe.org), a nonprofit organization committed to driving responsible business practices globally. Top-level participants from DuPont, Microsoft, ARAMARK, Emerson, TE Connectivity, Rockwell Automation, Siemens, and others joined forces to examine the latest trends and best practices for mitigating supply-chain challenges caused by corruption and misappropriated IP.

Download the full report at this link: http://www.conference-board.org/publications/publicationdetail.cfm?publicationid=2379

About The Conference Board The Conference Board is a global, independent business membership and research association working in the public interest. Our mission is unique: To provide the world's leading organizations with the practical knowledge they need to improve their performance and better serve society. The Conference Board is a non-advocacy, not-for-profit entity holding 501(c)(3) tax-exempt status in the United States. For more information, please visit www.conference-board.org

Follow The Conference Board Twitter | Facebook | LinkedIn

About CREATe.org The Center for Responsible Enterprise And Trade (CREATe.org) is a non-profit organization dedicated to helping companies and their suppliers and business partners reduce counterfeiting, piracy, trade secret theft and corruption. We believe that by improving practices along global supply chains, companies can help drive jobs, growth and innovation - benefiting their own businesses, the global economy, and the communities where they operate. And by partnering with governments, non-profits, think tanks and associations, we hope to amplify the work of each. To achieve our shared goals, we have developed CREATe Leading Practices for IP Protection and CREATe Leading Practices for Anti-Corruption. Our offering includes practical, scalable and cost-effective online assessments, independent evaluations, training and other resources designed to benchmark and improve processes for safeguarding IP and preventing corruption. We are based in Washington D.C., and our work is global. Please follow us on Twitter @CREATe_org or connect with us on LinkedIn.

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