No company is immune to bribery, fraud and corruption conduct
The pressure to meet short-term financial goals are
often so great that many respondents say they have witnessed unethical behaviour
at their companies. In fact, one in five respondents stated that they have
seen financial manipulation occur in their businesses. When broken down
by sector, 9 percent have seen revenues recorded before they should have
been; 7 percent saw underreporting of costs, and 9 percent said customers
were being sold unnecessary products to hit sales targets.
Many executives thinking that fraud
and corruption are problems faced only by other companies or in other
sectors. The percentage of those believing their company's anti-corruption
policies are relevant to their work has decreased. Now fewer than half
say their colleagues would consider the policies appropriate.
In a recent survey we find that upto 42 percent of respondents were aware
of irregular financial reporting within their company. Another 57 percent
felt corrupt practices are widespread in some countries.
Uncomfortable reading
The survey also said compliance officials should suffer no illusion that
all of their employees are on board with anti-corruption policies. In
fact, more than a quarter of sales and marketing respondents said they
consider it acceptable to offer gifts or services in order to win or keep
business. One in six respondents believes his company's compliance program
harms its competitiveness.
The survey is uncomfortable reading due to global unethical conduct. Inflating
revenues, underreporting costs or encouraging customers to buy unnecessary
stock. This is coupled with the perception that bribery and corruption
remain widespread in several markets. Companies have good reason to take
a critical look at their numbers. Management needs to ask the right
Tempting unethical behaviour
Managers face increasing pressure to produce results in a tight market,
which can include personal pressure in the form of salaries or bonuses.
While an average of 60 percent believes their company's managers will
be under increased pressure in the next 12 months, that percentage was
even higher in several European countries like Russia and Greece. Unexpectedly
even countries like Norway, and Ireland reported the pressure on unethical
behaviour as more tempting to gain advantages.
Many recent surveys showe that global executives believe that corruption
is widespread in all sectors (26 percent). While 40 percent acknowledged
it is common practice in the public sector. That so-called perception
gap narrowed somewhat in countries where rule of law and good governance
in a priority. A mere six percent said it is common practice in their
sector in those countries.
At the 10th annual European GRC Summit in London we will conduct a series
of workshops on Bribery, Fraud and Corruption Issues. http://www.grcassembly.com/agenda.htm
From; How to solve the problems of business performance, pressure, and
fraud, to The ultimate review of current UKBA & FCPA cases; Volkswagen,
FIFA, Petrobras, 1MDB, Toshiba. http://www.grcassembly.com/register.htm
