When it comes to testing and measuring if goals were being achieved, there was a clear gap between ambition and capability within many organizations in how they used technology to detect and prevent fraud and misconduct.
At the event conducted in Sydney, Australia, many examples were given of how companies are implementing profound structural changes that are aimed at becoming more customer-focused, boosting transparency and embracing an integrity culture.
In Hong Kong, one attendee spoke of the need to engage employees through staff-led solutions. This would help organizations change, as workers have a vested interest in the solutions being successful.
In Princeton, New Jersey, where the focus was on the pharmaceutical sector, executives described strategies for spreading accountability throughout their organizations. Some said they used tactics, such as “ride-along” with sales representatives, to understand how the rules about interacting with doctors and patients were put into practice.
In Mumbai, participants pointed out that, along with fostering a strong internal culture of integrity, companies must also look carefully at the values and practices of the third-party agents they engage with, such as suppliers and consultants, whose misconduct could harm their reputation.
Does the reward system work?
At the event held in London, there was widespread disapproval of bounties for whistle-blowers. Others, however, believed that whistle-blowers face huge obstacles, such as potential conflicts with nondisclosure agreements.
In Sydney, attendees debated whether, in the wake of Australia’s Royal Commission inquiry into misconduct in the financial services industry, the proposed regulatory changes, new codes of conduct and remuneration policies would succeed in building an integrity culture and reduce misconduct. There was some skepticism that the new remuneration policies would go far enough in limiting the type of shorter-term financial incentives that encourage fraud and poor behavior.
Technology is one tool that can help, but not single-handedly
Technology was identified as being important in helping companies detect and prevent fraud and misconduct. Artificial intelligence (AI) and innovative digital technologies are creating vast vaults of data that can be analyzed by companies to boost compliance. But this data must be securely managed, or it can pose a serious risk to business integrity.
At the event held in Asia, one attendee discussed using surveillance and big data to identify bad behavior as well as deploying psychographic analysis — “We need to understand our people,” he said plainly.
However, not everyone saw the “Big Brother” approach as the right strategy or only answer and some even expressed concerns around privacy. Privacy inevitably came into sharp focus whenever the conversation turned to technology. Numerous participants asserted that human management was essential to safeguard a proper appraisal of the privacy issues brought about by new technology and to supervise relationships between a company and its staff.
Aside from technology, one regulator asked if the right people, typically lawyers, were being deployed to implement the changes required — “Do we have the right skill sets to support culture change?” she asked. For setting up the right framework, certainly. But when it comes to testing and measuring if the goals were being achieved, there was a gap between ambition and capability within many organizations.
Integrity leads to commercial success
Across the six events held globally, while participants expressed concerns about the serious risks that businesses were facing, the mood was generally uplifting. For most, there was a feeling that things were improving. Enforcing corporate culture, according to many, was becoming a board-level responsibility. Chief executives and directors, now more than ever before, recognize the regulatory, reputational and commercial consequences of getting it wrong.
At the event held in London, one guest speaker went so far as to predict that large-scale corporate corruption would cease to exist in years to come — “Corruption is anti-competitive, increases poverty and matters deeply.” she said.
In Mumbai, participants agreed that India’s business leaders have become far more serious about preventing fraud and corruption in recent years. There was general agreement that strong corporate governance is critical for the country to attract the foreign portfolio investment needed for its economy.
A company that acts with integrity and adheres to sound principles of morality will be better placed to combat illegal and irregular conduct. It will also improve its business performance.
Poor behavior will never be eradicated, but its incidence can be reduced. Companies that embed the “Integrity Agenda” will bridge the gap between corporate intentions and actual behavior and will also reduce conduct risk and reap the commercial rewards.
Embedding an integrity culture — good governance, honesty, effective controls and data analytics tools — across a business can reduce risks and improve a company’s performance.