20/04/2016 - 05:48

Corruption a worry for business leaders

20/04/2016 - 05:48

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One in four Australian business leaders is concerned about bribery and corruption in their own workplaces, an EY report has found.

One in four Australian business leaders is concerned about bribery and corruption in their own workplaces, an EY report has found.

Through a global survey of about 3,000 senior business leaders from 62 countries, EY’s  corporate misconduct report found the number of Australian executives who believed bribery and corrupt practices were widespread had more than tripled to 28 per cent in the past two years.

That’s against the global average of 39 per cent, according to the latest survey.

EY fraud investigation and dispute services managing partner for Oceania Rob Locke said with the recent revelations on the possible misuse of offshore financial structures, business leaders were right to be focused on securing a deeper understanding of their clients, partners and suppliers.

“Increased transparency is, however, only one facet of the solution to a problem that shows no sign of abating,” Mr Locke said.

“While the proportion of Australian executives who believe that bribery and corrupt practices happen widely in the country is still lower than the global average, the significant increase reported over the past two years would suggest executives locally are waking up to the risks and increasing their focus on the issue.

“In a question introduced in this year’s survey, 25 per cent of Australian respondents reported that they have had personal concerns about bribery and corruption in their own workplace.”

The survey also found that the vast majority of business leaders agree that holding individuals accountable for illegal acts would help deter future fraud, bribery and corruption.

However, 25 per cent of Australian respondents also admitted that they could justify unethical behaviour in order to meet financial targets.

“Increased levels of global cooperation between law enforcement agencies are making it harder for fraudsters and bribe-payers to evade prosecution,” Mr Locke said.

“However, with respondents indicating that such misconduct is showing no signs of abating, companies continue to be exposed to major risks driven by the illegal actions of a small minority of employees.”

The research conducted through the EY survey found that Australian companies were frequently failing to take the appropriate steps to respond and reduce their risk exposure to corruption and fraud.

“On a more positive note though, the survey found Australian companies were the most likely to identify third parties, such as vendors, agents, distributors and joint venture partners, as part of their anti-corruption due diligence,” Mr Locke said.

“Only 3 per cent of Australian respondents said they didn’t do this, much lower than the global average of 19 per cent.”

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