4 minute read 14 Sep 2022
Culture of integrity in the workplace

How a culture of integrity can enhance regulatory compliance and boost cyber defenses

By Arpinder Singh

EY Global Markets and India Leader, Forensic & Integrity Services

Leading forensic accountant and veteran expert witness. Advising global clients on compliance, anti-corruption and corporate governance. Disruptive thinker. Technology aficionado. Author.

4 minute read 14 Sep 2022
Related topics Forensics Cybersecurity

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  • Elevating trust confidence and integrity

EY's Forensic Outlook 2022 assesses the need for a robust ethical and risk management framework.

In brief

  • A largely unpredictable economic climate, compounded with regulatory challenges and cybersecurity issues concerns businesses.
  • Companies face increasing fraud, cyber-attacks and compliance-related issues.
  • With stakeholders, investors and regulators demanding more transparency, achieving good corporate governance will take precedence. 

In the wake of the upheaval caused by geopolitical tensions, health crises, and market instability, businesses continue to find themselves grappling with higher incidences of fraud and resulting integrity and compliance challenges. While the initial disorder has seemingly been brought under control to some extent, the long-term repercussions for businesses are only now beginning to surface. Companies that were already reeling under significant pressure, are now being challenged to mitigate fraud, integrity, and compliance concerns. 

According to EY’s Global Integrity Report 2022, more than half of the global respondents surveyed believed that standards of integrity had either remained the same or even worsened in the past 18 months. Meanwhile, 52% of respondents from India relayed that the importance of behaving with integrity was communicated to them frequently in the last two years. With companies looking to make strides toward a better working world, EY’s Forensic Outlook 2022 takes note of significant factors that will shape the way organizations focus on building trust capital, raising business confidence, and implementing a robust integrity framework. 

 Corporate ethics and sound governance is the key

Recognizing the heightened integrity challenges that are being faced today, start-ups and family-led businesses can benefit from investing in forging good business ethics and governance frameworks. The year ahead may see founders, promoters as well as board members focus on sound corporate governance and ethical practices by leading from the front, especially in the face of crisis. Global Capability Centres (GCCs) will also look to nurture a uniform culture that focuses on ethics and is in line with their organizational vision. 

Changing global and local regulations will increase operational pressures and corporate India will have to explore new business models to stay abreast of various developments, resolve key business issues, improve regulatory compliance, and implement and monitor policies. A Managed Services model can be evaluated to tackle complex legal, regulatory, privacy, and compliance concerns. 

As companies eke out the beginnings of a better working world, they will be looking at investing in building a robust ethical and risk management framework to reap long-term business benefits.
Arpinder Singh
EY Global Markets and India Leader, Forensic & Integrity Services

Importance of having a resilient ESG strategy 

ESG compliance has been climbing up the list of priorities on organizations’ board agenda. Over the past two years, the regulatory landscape has undergone a major change. The implementation of SEBI’s mandate to listed companies to include the BRSR in their annual reports on the stock exchange from 1 April indicates the regulatory body’s commitment toward the formal implementation of ESG programs. SEBI requires companies to not only identify ESG risks but also detail their mitigation strategy and contingency plans. 

The year ahead will witness more oversight and stringent enforcement measures being taken against companies that fail to comply with these standardized as well as comprehensive disclosure requirements. Instances of misconduct, are likely to be highlighted through whistleblower complaints, leading to evaluation and pursual of tips to undertake corrective measures and stay on course.

New age frauds will continue to challenge organizations

Cybercrimes are at an all-time high around the world, with cybercriminals devising new ways to cheat organizations of tangible and intangible assets. The coming year will see a further proliferation in cyber risks, including transactions where cryptocurrency is involved. Non-fungible tokens are another area that will be targeted considering the exclusivity of these invaluable digital assets. To mitigate new age frauds in an increasingly digital era, there should be strong technological safeguards with multiple firewalls and security layers as well as protected work profiles to minimize business email compromises. Implementation of data loss prevention solutions can be a proactive step toward averting possible breaches.

Greater awareness of dispute resolution in the infrastructure sector and competition law

With growth opportunities galore and an influx of investments, the sky is the limit when it comes to the infrastructure sector. However, the inherent nature of the business with its complex engineering projects, long project lifecycles, differences in planned and actual scenarios, delays in approvals, acquisition of land, etc., along with disputes, claims, and potential litigations can be key impediments. One of the imperatives this year would be to make adequate changes not only in the structure of contracts but also reforms in legal frameworks to avoid stifling any growth opportunities at this time of rapid infrastructure development.  

The Competition Commission of India’s (CCI) recent enforcement actions make it crucial for management as well as employees to avoid any anti-competitive behavior. Issues such as price-fixing, bid-rigging, antitrust risks, supply chain relationships, fines, and penalties need to be explained to employees across levels. Creating awareness of relevant laws and regulations among the workforce will also enhance the governance framework where employees can report or raise concerns in case of breaches or non-compliance.

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Summary

As businesses continue navigating a rapidly changing compliance and regulatory landscape, building a strong ethical framework and improving integrity standards will be key in shaping organizations’ future.

About this article

By Arpinder Singh

EY Global Markets and India Leader, Forensic & Integrity Services

Leading forensic accountant and veteran expert witness. Advising global clients on compliance, anti-corruption and corporate governance. Disruptive thinker. Technology aficionado. Author.

Related topics Forensics Cybersecurity