16/07/2014 11:29:31 PM
Geraldine Magarey -
EY recently released its 13th Global Fraud Survey Overcoming compliance fatigue: Reinforcing the commitment to ethical growth, which provides some interesting insights into current attitudes around fraud, bribery and corruption. This survey conducted a large number of interviews in 59 countries including Australia and New Zealand.
There are two findings that should sound alarm bells for many organisations and in board rooms. Firstly, emerging risks are not being assessed effectively. This was particularly the case for cyber crime where 48% of respondents considered it to be a very or fairly low risk to their business.
The second major finding is that traditional fraud risks have not diminished. So despite the talk about emerging risks, boards need to remain focussed on traditional fraud risks too as unethical behaviour persists. The survey looked at behaviours such as offering inducements to win and/or retain business and misstating a company’s financial performance. These behaviours still rate on a survey of behaviour that a minority of executives are willing to justify.
Boards need to be asking management how they are promoting and incentivising ethical behaviour. As the survey states, it is very easy to describe how the organisation rewards growth. Does the remuneration structure favour growth over ethical behaviour? What should an organisation be doing to reward an ethical culture?
Our publication Why business ethics matter to your bottom line looks at the need to build institutional integrity into an organisation to support employees in making ethical choices.
Geraldine Magarey (Member since: 12/05/2011 2:42:58 AM)
As Senior Manager, Business Issues, my role covers advocacy, thought leadership, policy, education and providing technical guidance around various business issues. These include corporate governance, business ethics, financial literacy and increasing the participation of women in the workforce.
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