2 big problems for today’s workforce: more corruption, less trust

April 20, 2017 1:29 pm

Today’s businesses are operating in an uncertain economic environment. Popular discontent with globalization, political instability and slower growth in emerging markets is placing pressure on companies as they seek alternative ways to meet ambitious revenue targets.

Widespread mistrust among the workforce

Results of the biennial EY Europe, Middle East, India and Africa (EMEIA) Fraud Survey indicate that unethical behaviour and high levels of mistrust among colleagues are key characteristics of today’s workforce, particularly among executives, but also among younger generations.

Despite sporadic progress in tackling bribery and corruption across Europe, the Middle East, India and Africa (EMEIA), 51 per cent of respondents of the biennial EY EMEIA Fraud Survey still perceive the problem to be widespread in their country and 27 per cent of all respondents state that it is common practice in their business sector to use bribery to win contracts.

The survey interviewed 4,100 executives in large corporations in 41 countries. Respondents from the MENA region revealed that corrupt practices do happen in their countries: 19 per cent in Oman, 27 per cent in the UAE, 43 per cent in Saudi Arabia, 53 per cent in Jordan and 75 per cent in Egypt responded in the affirmative.

A third of UAE executives resigned over ethics

Nearly a third of UAE executives have resigned from a job over concerns about unethical conduct at their company, the survey has found.

The EY Europe, Middle East, India and Africa (EMEIA) Fraud Survey found 42 per cent of UAE respondents believed regulatory activity had a positive impact on their company’s ethical standards, compared to 28 per cent worldwide.

It also found 32 per cent felt under pressure to withhold information ore concerns about misconduct rather than report it. Only 9 per cent of UAE respondents were aware of whistle-blowing hotlines used to monitor compliance with anti-bribery and corruption laws.

Michael Adlem, EY MENA Fraud Investigation & Dispute Services Leader, said: “Despite the need for more improvement, UAE executives have a lot more confidence in regulations as a deterrent of unethical behaviour compared to their global counterparts.

“Even though a third of UAE executives are not afraid to leave their job if they are aware of unethical conduct, a third of UAE executives are also willing to withhold information about ethical misconduct.

“The different extremes in behaviour and lack of awareness about whistle-blowing hotlines indicate a need for companies to work harder at setting the right tone on business ethics to foster a more unified culture of ethical behaviour.”

Nearly three-quarters, 74 per cent, believed prosecuting individuals would reduce bribery, fraud and corruption.

Survey respondents support punishment for managers

The EY survey reveals a noticeable difference in perceptions between senior management and other employees about the effectiveness of communication around ethical standards.

Almost half of all board directors and senior managers have heard such messages frequently compared to only 32 per cent of their more junior colleagues.

Senior management are failing to foster a culture of ethical behaviour, finds the survey: 77 per cent of board directors or senior managers say they would be willing to justify some form of unethical behaviour to help a business survive, with one in three willing to offer cash payments to win or retain business.

Nevertheless, 28 per cent of respondents believe that regulation has had a positive impact on deterring unethical behaviour, an increase of 4 percentage points from the 2015 survey, with 77 per cent of respondents agreeing that the prosecution of individuals would help deter fraud, bribery and corruption by executives.

Use of technology in the fight against bribery and corruption

Increased global connectivity means that a company’s assets are at greater risk from theft, damage or manipulation by insiders than ever before, the EY report said.

With regulators placing pressure on companies to self-report instances of misconduct, companies need to harness new technologies to identify and mitigate internal threats to the business.

Such insider threats can be difficult to detect without gathering and analysing data from a wide range of sources, including email communication or building access logs.

Despite the need to collect such data, the EY survey identified a tension between opinions about what data companies should monitor and the types of surveillance that their employees consider a violation of privacy.

The report noted that 75 per cent of respondents say their companies should monitor data sources such as emails, telephone calls or messaging services, and yet, 89 per cent of respondents would consider monitoring these data sources as a violation of their privacy.

Employees are concerned but do not report

The survey identified three important findings relating to whistleblowing:

*There are rising levels of concern about unethical behaviour among employees

*Awareness of whistleblowing hotlines is low and pressure on employees not to report concerns is substantial

*A significant number of respondents indicate they would report concerns externally irrespective of the response to any internal report they had made

EY survey finds that when respondents are concerned about misconduct, they are either hesitant to, or do not know how to blow the whistle. When employees are willing to report, a significant majority are prepared to report outside of the business to regulators, law enforcement or the media. For companies, the process of then appropriately managing the situation becomes more complicated.

Almost half of those who have had concerns about unethical conduct have faced pressure to withhold information. According to the survey, 30 per cent would not report information due to loyalty to their colleagues, 51 per cent would not report due to concern over their future career and 73 per cent would consider providing information to a third-party, such as a regulator or law enforcement agency.


Hina Latif
By Hina Latif
Hina Latif has over six years of media and publishing experience under her belt, spanning multiple magazines and a newspaper in the UAE. She studied creative writing at the University of Oxford and has a Master’s degree in Journalism.