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Corruption perception

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A quarter of UK employees still believe that bribery and corruption happens widely in business in the UK, according to the audit firm EY’s biennial Europe, Middle East, India and Africa Fraud Survey.

The perception of UK respondents is that little progress has been made over the last 24 months, with few changes in the survey results from 2015. Nevertheless the findings compare favourably to some other countries, with 51pc of all respondents across EMEIA reporting that bribery and corruption is widespread in their country.

The 11-page report, titled “Human instinct or machine logic – which do you trust most in the fight against fraud and corruption?” showed only sporadic progress across EMEIA, based on a survey of 4100 employees from large businesses in 41 countries, including 100 respondents from the UK. Of the 41 countries, fewest respondents perceived corrupt practices were happening widely in business in Nordic states – Norway, Finland, Denmark and Switzerland; and Switzerland.

According to the survey, some companies in the UK are struggling to foster a culture of ethical behaviour: only 24pc of UK respondents have frequently heard their senior management communicate about the importance of maintaining ethical standards in business, and only 29pc of UK respondents felt that action has been taken by their company against an employee for breaching ethical standards or regulation, compared to 43pc in EMEIA. Some 42 per cent of UK respondents believe that their senior management would act unethically to help a business survive, compared to 58pc in EMEIA. Twelve per cent of UK respondents also said they believed their managers would offer a cash payment and that 16pc would offer personal gifts to win or retain business. Three quarters, 75 percent of UK respondents say they are also supportive of further initiatives to hold individuals to account for misconduct (which compares with 77pc for all EMEIA).

Jonathan Middup, Partner at EY Fraud Investigation and Dispute Services says: “Bribery and corruption is still perceived to be a prevalent issue in the UK, despite increased focus and scrutiny from the Government and regulators. The picture we are seeing from the survey and in our conversations with clients is that while many companies may think they have an effective compliance framework in place, in reality some are struggling to create a culture where it is in employees’ interests to do the right thing. Rules and regulation are only part of the solution. It’s critical that the tone is set from the top, with senior managers leading by example. Training and awareness programmes also have a role to play, helping employees to understand the consequences of fraud and corruption, but to be effective these should include discussion of grey areas and ethical dilemmas.”

Culture of reporting

While 37pc of UK respondents are aware of whistle-blowing hotlines, a striking number of respondents stated they would not report unethical behaviour due to concerns about future career progression within their company (54pc) or fear for personal safety (33pc). When asked about changing attitudes towards whistle-blowers over the last three years, 18pc of UK respondents felt it has become easier for them to report their concerns internally and 11pc felt whistle-blowers are offered more protection. In contrast respondents in emerging markets such as India (27pc) and Nigeria (24pc) agree that they are now offered more protection to blow the whistle in comparison to three years ago.

Middup adds: “Many employees are unaware of the correct channels to report wrongdoing but perhaps more worryingly, it’s clear that some also feel under pressure to withhold information. Companies need to actively start fostering a culture whereby employees feel encouraged to come forward to report misconduct and that they will be protected if they do.”

Monitoring

UK respondents also showed discomfort with their company’s use of technology to monitor data sources to reduce fraud and corruption risk. Twenty one percent said their company should monitor emails, with 43pc of UK respondents saying their company should undertake Criminal Record Bureau checks. Only 7pc felt their company should monitor their instant messenger accounts, while 2pc felt it should monitor their social media profiles, the lowest of all countries surveyed. When asked if they support the routine collection and analysis of their data from email, telephone, security systems or the public record, respondents from Western (42pc) and Eastern (49pc) Europe were less supportive in comparison to India (87pc) and Africa (80pc).

Hywel Ball, EY’s UK Managing Partner of Assurance added: “Data ethics is becoming a growing topic of concern for both consumers and business and the law is struggling to keep up. With vast quantities of information now available about all of us at the touch of a button, who owns this data and how it is used isn’t clearly defined. Companies need to strike a careful balance with the moral and ethical issues associated with data analysis, while also gathering enough information in order to reduce their exposure to fraud, bribery and corruption risk.”

For the survey in full visit http://www.ey.com/uk/en/services/assurance/fraud-investigation—dispute-services/ey-fraud-survey.


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