3 minute read 6 Aug 2019
A woman's hands in front of her face.

Unethical behavior among the biggest risks facing Irish business

By Julie Fenton

EY Ireland Partner; Head of Forensics & Integrity Services and Global Operations; Talent Leader Forensic & Integrity Services

Advocate for gender equality. Proud mother. Runner. Sports enthusiast.

3 minute read 6 Aug 2019

If there isn’t a culture of personal accountability led from the top, then no number of policies will prevent fraud and corruption.

The number of senior decision-makers in Ireland who would justify potentially unethical actions to help their business survive an economic downturn has risen to 50% from 38% according to EY’s Global Fraud Survey.

Yet just 10% say bribery and corruption happen widely in Ireland, almost four times lower than the global average of 38%, and a stark contrast to the 47% of Irish employees across all levels who, when surveyed for a similar report carried out last year, believed it happens widely.

Such a marked disconnect between their views and the views of those on the ground suggests that those at the most senior levels in Irish organisations may not be fully aware of the levels of unethical behaviour happening within their organisations, and in the market at large, and may also suggest something of a misunderstanding of what constitutes bribery or corruption.

EY Global Fraud Survey

The EY Global Fraud Survey is a biennial study of 2,550 senior decision-makers in a sample of the largest companies in 55 countries and territories. The polling sample was designed to elicit the views of executives with responsibility for tackling fraud, mainly CFOs, CCOs, general counsel and heads of internal audit.

Everyone should work together and take responsibility

The survey also shows that decision-makers in Ireland say that management is responsible for ensuring that employees behave with integrity. Further, Ireland lags behind other developed nations in penalising people for breaching policies. Just 12% say individuals are responsible for ensuring they behave with integrity (vs. 22% globally), and 44% say people have been penalised in their organisation for breaching policies (vs. 57% globally). Instead, Irish businesses see management (58%) and the board (24%) as accountable for employee integrity.

While it’s essential that management and boards have clear processes and policies in place to prevent fraud and corruption, and they are ultimately responsible for their business’ ethical code, an organisation is made of the sum of its parts – people. If people aren’t held to account for their own actions, and if there isn’t a culture of personal accountability led from the top, then no number of policies will prevent fraud and corruption.

It is vital that organisations have programmes and training in place to make their employees aware of the implications of their actions, and that they understand the consequences of behaving unethically – both for themselves and for the organisation.

The survey also examined the risks faced by business globally

60% of Irish businesses say that the macroeconomic environment poses the biggest risk to their business, significantly higher than the global average of 42%.

Half (52%) of Irish businesses say that a cyber-attack is among the biggest risks facing their business, versus a global average of 37%.

A further 30% say fraud and corruption is among the biggest risks

26% say geopolitical risk is the biggest threat

While macroeconomic and geopolitical factors are largely outside businesses’ control, fraud and corruption and cyber-attacks are two risk areas highlighted that businesses can mitigate, and should be prioritised. Businesses need to maintain a sharp focus on those issues that they can reduce, prevent or mitigate by educating staff about the fraud risks they face and their responsibility for mitigation.

Summary

While it’s essential that management and boards have clear processes and policies in place to prevent fraud and corruption, and they are ultimately responsible for their business’ ethical code, an organisation is made of the sum of its part. 

About this article

By Julie Fenton

EY Ireland Partner; Head of Forensics & Integrity Services and Global Operations; Talent Leader Forensic & Integrity Services

Advocate for gender equality. Proud mother. Runner. Sports enthusiast.