Senior managers failing to set right tone on business ethics, finds EY Fraud Survey
- 51% of all respondents still perceive that corrupt practices happen widely in business in their country
- 77% of board members or senior managers say they could justify unethical behavior to help a business survive
- Only 21% of respondents are aware their company has a whistleblowing hotline
Despite sporadic progress in tackling bribery and corruption across Europe, the Middle East, India and Africa (EMEIA), 51% of respondents to the biennial EY EMEIA Fraud Survey still perceive the problem to be widespread in their country. Twenty seven percent of all respondents state that it is common practice in their business sector to use bribery to win contracts, including 14% of respondents in Western Europe. The report, Human instinct or machine logic – which do you trust most in the fight against fraud and corruption?, surveyed 4,100 employees from large businesses in 41 countries.
Senior management are failing to foster a culture of ethical behavior finds the survey: 77% of board directors or senior managers say they would be willing to justify some form of unethical behavior to help a business survive, with one in three willing to offer cash payments to win or retain business. Nevertheless, 28% of respondents believe that regulation has had a positive impact on deterring unethical behavior, an increase of 4 percentage points from the 2015 survey, with 77% of respondents agreeing that the prosecution of individuals would help deter fraud, bribery and corruption by executives.
The Generation Y cohort (25 to 34 year olds), who constitute 32% of respondents, demonstrate more relaxed attitudes toward unethical behavior the survey finds. Seventy-three percent state that such behavior is justified to help a business survive, compared with 49% of 45 to 54 year olds (Generation X) surveyed who hold this view. Furthermore, 68% of Generation Y respondents believe their management would engage in unethical behavior to help a business survive, and 25% of this age group would offer cash payments to win or retain business. Generation Y also show a heightened distrust of their co-workers, with 49% believing that their colleagues would be prepared to act unethically to improve their own career progression, compared with 40% across all age groups.
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