Employees want corporate fraud, bribery and corruption policies simplified and consistently applied
Singapore, 25 May 2017
- Respondents would bypass internal whistleblower hotlines, preferring to report misconduct via law enforcement and social media
- Lack of clarity among millennials on what constitutes unethical behavior
- Use of personal devices for work exposes businesses to cyber attacks or internal threats and require clearer guidelines and policies
An overwhelming majority of respondents to the EY Asia-Pacific (APAC) Fraud Survey 2017 want to work for a compliant organization but are confused about what is expected of them because compliance policies are unclear and inconsistently delivered. This is leading to calls for corporate policies that combat fraud, bribery and corruption to be simplified so as to help employees fully understand and comply with them accordingly.
The EY APAC Fraud Survey 2017, Economic uncertainty/Unethical conduct: How should over-burdened compliance functions respond? surveyed 1,698 employees from large businesses in 14 Asia-Pacific territories, including 105 from Singapore.
The desire to work for an ethical organization is strong: more than two in five (44%) in APAC and a-third (33%) in Singapore say they would accept a lower salary if it meant working for an ethical employer.
Eighty-five percent of APAC respondents (Singapore 76%) want their organization’s corporate compliance policies to be simplified and localized to make them more understandable.
Specifically, they think existing policies are too long and use unnecessarily complex language or legal jargon. Thirty-nine percent in APAC (Singapore 40%) say their organization’s code of conduct in its current format has little impact on how employees actually behave.
Reuben Khoo, EY Asean Leader, Fraud Investigation & Dispute Services, Ernst & Young Advisory Pte. Ltd. says:
“Employees are demanding absolute clarity and anything short of that impacts morale, hiring, retention and overall business performance. Corporates need to simplify their compliance protocols to help employees to follow them. Else employee frustration with discrepancies and inconsistencies in how compliance programs are executed can create major stumbling blocks to managing effective compliance programs and bringing fraud, bribery and corruption under control.”
Whistleblowing hotlines not used by employees
Sixty-one percent of APAC respondents and 80% of Singapore respondents say they have a whistleblowing hotline within their organization. However, when it comes to reporting unethical acts, employees are reluctant to use the existing internal whistleblower hotlines as they do not trust their organization will protect their anonymity or follow-up with proper remedial actions. Twenty-eight percent of APAC respondents and 22% of Singapore respondents say they would prefer to use external law enforcement hotlines and social media channels to report misconduct instead.
Belinda Tan, Partner, Fraud Investigation & Dispute Services, Ernst & Young Advisory Pte. Ltd., says:
“It’s encouraging that more companies now have whistleblower hotlines. But we’re concerned that employees don’t have enough faith that their reports will be handled confidentially or that these reporting mechanisms will result in proper follow-up and punishment for the guilty parties.”
Managing millennials: Lack of clarity is “a wake-up call for businesses” Nearly half of all respondents (APAC 49%, Singapore 42%) think that their senior management would ignore unethical behavior to achieve corporate revenue targets. Employees are receiving mixed messages from senior management causing them to mistrust the organization as a result of the lack of clarity and consistency.
As well, while 83% of millennials in APAC and 69% in Singapore say they would look for a new job if their organization was involved in a major fraud, bribery or corruption case, the survey finds that millennials (age group: 25-34 years old) do not fully understand what constitutes unethical behavior.
Based on the survey, millennials employees are more likely than any other age group to be prepared to offer cash payments to win or retain business (APAC: 38% vs. 28% for all other age groups, Singapore: 45% vs. 21% for all other age groups); and would extend monthly reporting periods (APAC: 42% vs. 31% for other age groups, Singapore: 39% vs. 34% for other age groups) to meet financial targets. Yet, when provided with more clear-cut choices, such as ignoring compliance controls, millennials responded in line with all other age groups that this was not justified to meeting financial targets.
Tan says: “This is a wake-up call for businesses to revisit their compliance programs, invest more in education and lead by example. On the one hand, millennials feel it is okay to behave unethically in some situations. Yet on the other hand, they take a strong stand against working for an unethical business. This discrepancy needs to be addressed early and quickly to help ensure businesses hire and retain the best young talent, who will form their future workforce.”
Caution and clear policies needed on use of personal devices for work
Just under half (47%) of APAC respondents say there’s no particular company policy controlling how staff use personal devices for work-related activities at their organizations. This creates new vulnerabilities for organizations with almost half (49%) of respondents agreeing that they conduct business using their personal mobile devices even though they may have been issued with a work mobile device, and 66% recognize that there are risks associated with using personal devices for work.
In comparison, Singapore respondents are more cognizant of such risks. While half of Singapore respondents say that their organizations do not have any policies against using personal mobile devices for work-related purposes, a strong 79% recognize that there are risks associated with doing so. As such, less than a-third (31%) reveal that they conduct business using their personal mobile devices, despite having been issued with a work mobile device.
Khoo says: “Companies often think of threats as external, and ignore the very real threats posed internally. The current safeguards are inadequate in repelling criminals, including rogue
employees who are intent on stealing personal data, intellectual property or even a company’s cash. Designing and enforcing policies regarding the use of personal devices for work-related activities would help mitigate the risk of internal threats and cyber attacks.”
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About EY’s Fraud Investigation & Dispute Services (FIDS)
Dealing with complex issues of fraud, regulatory compliance and business disputes can detract from efforts to succeed. Better management of fraud risk and compliance exposure is a critical business priority — no matter the size or industry sector. With more than 4,500 fraud investigation and dispute professionals around the world, EY provides the analytical and technical skills needed to quickly and effectively conduct financial and other investigations, as well as gather and analyze electronic evidence. Working closely with you and your legal advisors, we will assemble the right multidisciplinary and culturally aligned team, and bring an objective approach and fresh perspective to challenging situations, wherever you are in the world. And because we understand that you require a tailored service as much as consistent methodologies, we work to give you the benefit of our broad sector experience, our deep subject matter knowledge and the latest insights from our work worldwide.
About the survey
Between November 2016 and February 2017, our researchers — the global market research agency Ipsos — conducted 1,698 interviews with employees of multinational corporations and domestic companies in 14 APAC territories: Australia, mainland China, Hong Kong, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand, Vietnam. The interviews were conducted online in local languages on an anonymous basis covering a mixture of company sizes, job roles and industry sectors.