- 33% said their organization has experienced a significant fraud in the last 18 months
- 52% stated unethical behaviour in their organization is often tolerated when seniors or high performers are involved
- 65% said the COVID-19 pandemic has made it more difficult for organizations to conduct their business with integrity
India, 24 January 2022:
An upsurge in incidents of fraud, high tolerance toward unethical conduct, and diminishing integrity standards threaten to disrupt corporate India, as per
EY’s Global Integrity Report 2022, Tunnel vision or the bigger picture
. The India findings reveal that 33% of the respondents comprising senior management and boards said that their organization has experienced a significant fraud in the aftermath of the coronavirus outbreak. Here, India ranked second among 54 countries surveyed. Worryingly, 63% said they would indulge in some form of unethical conduct (ignore misconduct, falsify information, financial or customer records, pay or accept bribes) to improve their own career progression, a stark contrast to just 24% globally. 37% said that standards of integrity have either stayed the same or worsened over the last 18 months, and 52% said that unethical behaviour is often tolerated when seniors or high performers are involved, higher than global figures (33%).
Arpinder Singh, India and Global Markets Leader, Forensic & Integrity Services, EY says, “The pandemic’s aftershock and subsequent economic crunch have aggravated organizational challenges of working with integrity in times of crises. Management and Boards will have to lead by example, inspire an ethical culture, foster transparency, utilize technology and strengthen compliance, whistleblowing and environmental, social and governance (ESG) frameworks. Acting now will be key to setting up an enterprise that makes strides in the right direction and delivers on societal expectations as well”.
The report highlights the perspective of over 4700 business executives across 54 countries and territories. In India, 100 executives were surveyed, comprising senior management and board members, on the post pandemic challenges faced, a widening gap between lowering integrity standards but higher levels of awareness, and creating the optimal environment for integrity to thrive. Key findings for India include:
Rising menace of corporate misconduct
Most businesses are operating on a fight-or-flight response system in these volatile times and ethical conduct may take a back seat in the face of profits. Short term gains seem to outweigh the benefits of operating with integrity in the long run, with management willing to overlook key aspects of compliance and integrity.
- 59% reveal that there are managers in their organization who would sacrifice integrity for short-term financial gain, compared to 43% globally
- 53% said it is easy to bypass the standard business rules and processes in their organization
- 51% express concerns about misconduct that they did not report, higher than 30% globally
- 41% feel pressure from management not to report misconduct
Blowing the whistle to raise concerns
The success of a whistle-blowing framework depends a lot on how employees feel about reporting misgivings. Employees at all levels need to be confident that they can report without fear of negative consequences. That said, there may be times that they may feel reporting won’t trigger change or see any action.
- 48% said people are more concerned now than three years ago to blow the whistle on misconduct
- 39% express apprehension on using whistle-blowing channels because they feel that their concerns won’t be acted upon
- 34% said people in their organization are afraid of using the whistle-blower hotline
Greater transparency is key in third-party dealings and transactions
M&A activity, currently running at historic levels, also exposes the organization to significant risk. Leaders should be concerned as these heightened perceptions of risk are not being matched by heightened levels of mitigation. Mitigating fraud risks involved in all third-party dealings should be one of the primary objectives of devising an integrity framework.
- Cybersecurity (43%), data privacy violations (41%) and hidden high-risk relationships (30%) emerge as the most significant risks when acquiring, partnering with, or investing in, other organizations
- Only 31% agree to conducting a corruption and bribery review before acquisition, while 41% review the code of conduct and compliance policies – showing major gaps in overall due diligence procedures
- Globally, only 28% employees are confident that third parties abide by relevant laws and regulations
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Notes to editors
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
About EY Forensic & Integrity Services
Embedding integrity into an organization’s strategic vision and day-to-day operations is critical when managing complex issues of fraud, regulatory compliance, investigations and business disputes. Our international team of more than 4,000 forensic and technology professionals helps leaders balance business objectives and risks, build data-centric ethics and compliance programs, and ultimately develop a culture of integrity. We consider your distinct circumstances and needs to assemble the right multidisciplinary and culturally aligned team for you and your legal advisors. We strive to bring you the benefits of our leading technology, deep subject-matter knowledge and broad global sector experience.
About the survey
Between June and September 2021, researchers — the global market research agency Ipsos MORI — conducted 4,762 surveys in the local language with board members, senior managers, managers and employees in a sample of the largest organizations and public bodies in 54 countries and territories worldwide.