There remains a mismatch between intentions of integrity and actual behaviour, EY said.
Despite regulators and law enforcement agencies around the world imposing more than US$11b of financial penalties since 2012, 10% of Singapore executives still believe bribery and corrupt practices remain prevalent in business, EY revealed in a report. They shared the sentiment with 38% of global executives surveyed.
EY Asean fraud investigation & dispute services leader Reuben Khoo noted that the perception levels of corruption in Singapore are low due to the anti-corruption culture the island nation has built over the years. "In that light, companies may question the need for regulatory compliance and if it could be a barrier to growth," he said.
However, there remains a mismatch between intentions and actual behaviour. About 28% of Singapore respondents (global: 13%) say they would justify making cash payments to win or retain business.
However, Khoo argued that on the contrary, the benefits of compliance to demonstrate integrity can actually improve business performance. "Particularly as the business environment becomes more competitive and complex, management teams must continue to communicate its commitment to go against unethical conduct in their organisations. Compliance programs need to keep pace with the impact of rapid technological advancements and the increasingly complex risk environment on business operations. More robust risk management should be considered a strategic means of improving business performance,” he said.
The survey found that integrity sits high on the board agenda, with 94% of Singapore respondents (global: 97%) recognising the importance of their organisation being seen to operate with integrity.
Meanwhile, 38% of Singapore respondents (global: 22%) feel that individuals should take primary responsibility for their organisation behaving with integrity, whilst 28% (global: 41%) say it is management’s primary responsibility.
Khoo commented, “More Singapore executives, compared with their global counterparts, believe that acting with integrity is every individual’s responsibility and not just that of management. Whilst it is important for management to set the right tone at the top, it comes down to each individual to uphold integrity and be vigilant about unethical conduct.”
However, there may be some level of disillusionment among companies with regards to their ability to “walk the talk” when it comes to managing misconduct. Just over half (52%) of Singapore respondents (global: 78%) believe their organisations have the clear intent of penalising misconduct. As well, only half (global: 57%) are aware of people having actually been penalised.
According to the report, ensuring that ethical conduct is managed effectively is not only an issue that needs to be dealt with internally, but also with third parties and those acting on behalf of the organisation. Yet third-party due diligence seems to be a low priority, with only 56% of Singapore respondents (global: 59%) indicating they have a tailored risk-based approach to due diligence on third parties.
Khoo said, “The pressing challenge for management and the board, therefore, is to build a robust culture of integrity and compliance in which employees do the right thing because it’s the right thing to do, and not just because a company code of conduct says they should."
“The encouraging news is that with today’s advances in forensic data analytics, companies can leverage new technologies to increase the effectiveness and efficiency of their efforts as they seek to improve investigation and compliance outcomes," he added.
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