Senior executives defy rules during trying times
Only 4 out of 10 senior executives based in Singapore pledged honesty in stating financial performances even during crisis, a survey show.
Pressure to meet revenue growth is undermining senior executives’ commitment to compliance with policies and laws. This was according to Ernst & Young’s 2012 Global Fraud Survey which canvassed the views of over 1,700 CFOs and heads of internal audit, legal and compliance in major companies in 43 countries around the world, including 25 respondents from Singapore.
Tolerance for unethical standards increases in difficult times While bribery and corruption do not appear as widespread in Singapore as compared to globally, the willingness of Singapore respondents to pay bribes or misstate financial performance for their business to survive the economic downturn has increased since 2010, when the last survey was undertaken. Just 36% of Singapore respondents stated they will not pay bribes or misstate financial performance, compared to 78% in 2010.
Close to half (48%) of respondents said that entertainment can be justified to win or retain business – a sharp increase from the 2% in 2010. Other worrying signs include an increase in number of Singapore respondents who stated that cash payments (20%, up from 12% in 2010) and personal gifts (12%, up from 2% in 2010) can be justified to win or retain business.
This is despite their high confidence (96%) in the willingness and effectiveness of local regulators and law enforcement authorities to prosecute and secure convictions for cases of bribery and corruption.
Lawrance Lai, Singapore Leader for Fraud Investigation & Dispute Services, Ernst & Young Advisory Pte. Ltd. comments: “This survey confirms the strong confidence in Singapore's regulatory system against bribery and corruption. Hence, compromising ethical standards to win business in difficult times is a very shortsighted move as it will not be long before the relevant authorities come knocking. The short-term gain of business opportunities can cost companies their long-term reputation. Management needs to set the right tone at the top to correct the mindset of growth over ethics, and Boards should ensure a climate of vigilance and zero-tolerance for unethical behaviors at all times.”