Ninety-three percent of respondents to the EY Asia-Pacific (APAC) Fraud Survey 2017 say they want to work for a compliant organization but are confused about what’s expected of them because compliance policies lack clarity and are inconsistently delivered.
This is leading to calls from employees for corporate policies combating fraud, bribery and corruption to be simplified to help ensure employees fully understand them and comply accordingly.
The EY APAC Fraud Survey 2017, Economic uncertainty/Unethical conduct: How should over-burdened compliance functions respond? surveyed 1,698 employees from large businesses in 14 Asia-Pacific territories.
The awareness about the dangers of fraud, bribery and corruption directly contrasts with employees’ understanding of what is and what isn’t allowed within an organization’s compliance protocols.
The survey found that employee frustration with discrepancies and inconsistencies of how compliance programs are executed creates major stumbling blocks to managing effective compliance programs and bringing fraud, bribery and corruption under control.
The desire to work for an ethical organization is strong; more than two in five (44%) say they would accept a lower salary if it meant working for an ethical employer.
Eighty-five percent of survey respondents want their organization’s corporate compliance policies to be simplified and localized to make them more understandable. Specifically, they think existing policies are too long and use unnecessarily complex language or legal jargon. Thirty-nine percent say their organization’s code of conduct in its current format has little impact on how employees actually behave.
“Employees are demanding absolute clarity and anything short of that impacts morale, hiring, retention and overall business performance,” says Chris Fordham, EY Asia-Pacific Leader, Fraud Investigation & Dispute Services. “Corporates need to simplify their compliance protocols to help ensure employees follow them.”
Whistleblowing hotlines not being used by employees
Sixty-one percent of respondents say they have a whistleblowing hotline within their organization. But when it comes to reporting unethical acts, employees are reluctant to use the existing internal whistleblower hotlines as they do not trust their organization will protect their anonymity or follow-up with proper remedial actions.
Nearly a third (28%) say they would prefer to use external law enforcement hotlines and social media channels to report misconduct instead.
Fordham says: “It’s encouraging that more companies in Asia-Pacific now have whistleblower hotlines. But we’re concerned that employees don’t have enough faith that their reports will be handled confidentially or that these reporting mechanisms will result in proper follow-up and punishment for the guilty parties”.
Managing millennials: conflicting values are ‘a wake-up call for businesses’
The survey offers key insights into the apparent conflicting attitudes of millennials toward fraud, bribery and corruption. Nearly half (49%) of respondents think that their senior management would ignore unethical behavior to achieve corporate revenue targets resulting in employees justifying wrong-doing.
More than any other age group, millennials stood out as feeling justified in participating in a variety of ethically questionable behaviors.
The survey also finds that millennials are more inclined to justify offering cash payments to win or retain business (38% vs. 28% for all other age groups).
Millennials are also more inclined to justify offering entertainment (46% vs. 33% for other age groups) or personal gifts (43% vs. 31% for other age groups) to win deals to help a business survive, and would even be willing to extend monthly reporting periods (42% vs. 31% for other age groups) to meet financial targets.
Yet these findings mark a strong contrast with millennials’ results when asked whether they would want to work for an unethical business or organization. Eighty-three percent say they would look for a new job if their organization was involved in a major fraud, bribery or corruption case.
Fordham says: “This is a wake-up call for businesses about the need to invest in more education and leadership by example. On the one hand, millennials feel it is okay to behave unethically in some situations. Yet on the other hand, they take a strong stand against working for an unethical business. This discrepancy needs to be addressed early and quickly to help ensure businesses hire and retain the best young talent, who will form their future workforce.”
Asia-Pacific awash with naiveté over the scale of cyber threats
Nearly half (47%) of the survey respondents say there’s no particular company policy controlling how staff use personal devices for work-related activities at their organizations.
This creates new vulnerabilities for organizations with almost half (49%) of respondents agreeing that they conduct business using their personal mobile devices, despite they may have been issued with a work mobile device, and 66% recognize that there are risks associated with using personal devices for work.
“Asia-Pacific is awash with naiveté over the scale of cyber threats. Companies often think these threats are all external, but ignore the very real threats posed internally," says Jack Jia, Partner, Fraud Investigation & Dispute Services, Ernst & Young Advisory Services Limited.
“The current safeguards are inadequate in repelling criminals, including rogue employees who are intent on stealing personal data, intellectual property or even a company’s cash. Designing and enforcing policies regarding the use of personal devices for work-related activities would help mitigate the risk of internal threats and cyber attacks.”