Despite new corporate criminal liability laws, the scale of bribery and corruption has shown no improvement globally since 2012. This is according to the 15th EY Global Fraud Survey by the audit firm, which surveyed 2,550 executives across 55 countries, including 50 executives from the UK.
This year’s survey found that despite over $11bn of financial penalties having been imposed by regulators and law enforcement agencies around the world since 2012, 38pc of global executives still believe bribery and corrupt practices remain prevalent in business.
In the UK, 34pc of respondents stated that they believe bribery and corruption happens widely in business, an increase of 20 percentage points from the 2012 survey. This level is also higher than the average of 21pc in Western Europe, with Germany, Switzerland and the Netherlands all recording significantly lower figures. Respondents in the UK also reported higher instances of criminal wrongdoing, with 18pc stating their company had experienced a significant fraud in the last two years – above the average for developed markets at 10pc.
Richard Indge, Head of Fraud Investigation and Dispute Services – UK and Ireland says: “Increasing regulation worldwide appears to be having little demonstrable impact on corruption. The prevalence of corruption, both globally and in the UK, means that businesses remain vulnerable to significant financial and reputational harm.
“Management teams must identify and address the root causes of unethical conduct that impact their organisation, while compliance programs need to keep pace with the impact on business operations from rapid technological advancements and the increasingly complex risk environment. More robust risk management should be considered a strategic means of improving business performance.”
Difference in levels of corruption between countries remains significant, with 20pc of respondents in developed markets indicating bribery and corruption happens widely in business, compared with over half of those (52pc) in emerging markets.
Regions where corruption risks were higher than the global average included Central and Eastern Europe (47pc), the Middle East (62pc) and Latin America (74pc), despite anti-corruption legislation and more active enforcement in some countries.
Overall, the findings show that there is often a lag between the introduction of stronger anti-bribery laws and reduced corruption, with Brazil, the Netherlands and the UK showing this trend. Brazil, for example, has seen the introduction of legislation and increased enforcement over the last four years. Yet, 96pc of Brazilian respondents indicate that corrupt practices occur widely in business. Near all, 97pc of global respondents recognising the importance of their organisation being seen to operate with integrity. Although improved customer perception, staff retention and business performance were all seen as benefits of demonstrating integrity, there remains a mismatch between intentions and actual behaviour, the auditors suggest.
