Senior managers must consistently model, encourage and enforce compliant conduct. Yet EY survey findings suggest this is not happening in almost half of the region’s organizations. Forty-nine percent of respondents say that, even though they see senior managers saying no to bribes, those same managers would ignore the unethical behavior of employees if their actions helped to achieve corporate targets.
Tellingly, almost a quarter (24%) of respondents do not believe that management would protect people who report cases of fraud, bribery and corruption. Meanwhile, 21% believe that their organizations simply do not investigate breaches of ethical standards.
These findings help to explain why, despite investment in compliance, employees are still engaging in unethical behavior, such as paying cash to win contracts or misstating financial performance. Making ABAC policies work requires behavioral change. Unless line managers ensure people feel comfortable to report misconduct, employees remain reluctant to do so.
Tough growth conditions used to justify unethical practices
Many employees are sympathetic to the view that tough economic prospects can excuse poor conduct. Asked if they personally could justify inappropriate conduct to help their business survive, more than two-thirds say they would introduce more flexible product return policies for customers. Almost a third (32%) would offer a cash payment to win or retain business. Here again, we find perceptions of leadership endorsement driving these inappropriate behaviors.
We can see this phenomenon playing out in corporate reporting: 50% of all respondents believe that companies in their country often report financial performance as better than it is.