Press release

Senior managers failing to set right tone on business ethics, finds EY Fraud Survey

London, 5 April 2017

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Despite sporadic progress in tackling bribery and corruption across Europe, the Middle East, India and Africa (EMEIA), 51% of respondents to the biennial EY EMEIA Fraud Survey still perceive the problem to be widespread in their country1. Twenty-seven percent of all respondents state that it is common practice in their business sector to use bribery to win contracts, including 14% of respondents in Western Europe. The report, Human instinct or machine logic – which do you trust most in the fight against fraud and corruption?, surveyed 4,100 employees from large businesses in 41 countries.


  • 51% of all respondents still perceive that corrupt practices happen widely in business in their country
  • 77% of board members or senior managers say they could justify unethical behavior to help a business survive
  • Only 21% of respondents are aware their company has a whistleblowing hotline

Senior management are failing to foster a culture of ethical behavior finds the survey: 77% of board directors or senior managers say they would be willing to justify some form of unethical behavior to help a business survive, with one in three willing to offer cash payments to win or retain business. Nevertheless, 28% of respondents believe that regulation has had a positive impact on deterring unethical behavior, an increase of 4 percentage points from the 2015 survey, with 77% of respondents agreeing that the prosecution of individuals would help deter fraud, bribery and corruption by executives. 

The Generation Y cohort (25 to 34 year olds), who constitute 32% of respondents, demonstrate more relaxed attitudes toward unethical behavior the survey finds. Seventy-three percent state that such behavior is justified to help a business survive, compared with 49% of 45 to 54 year olds (Generation X) surveyed who hold this view. Furthermore, 68% of Generation Y respondents believe their management would engage in unethical behavior to help a business survive, and 25% of this age group would offer cash payments to win or retain business. Generation Y also show a heightened distrust of their co-workers, with 49% believing that their colleagues would be prepared to act unethically to improve their own career progression, compared with 40% across all age groups.

Jim McCurry, EY EMEIA Fraud Investigation & Dispute Services Leader, says:

“Despite positive signs of improvement in some emerging economies, more than half (51%) of respondents across EMEIA still perceive bribery and corruption as a major challenge. Furthermore, there is worrying evidence of a lack of leadership from senior executives to tackle these issues, which may be negatively influencing the younger generation workforce.

“Companies need to take steps to create a culture in which it is in employees’ interests to do the right thing. Training and awareness programs can play a big role in helping individuals understand the consequences of fraud and corruption, and encourage them to come forward if they have concerns over unethical conduct.”

Failure to establish a culture of reporting unethical behavior
Despite the fact that whistleblowing hotlines are now considered an important part of a company’s compliance program, only 21% of respondents were aware of such a channel in their company, while 73% would consider providing information directly to a third party such as a law enforcement agency or regulator. Moreover, 52% of respondents had concerns about misconduct within their organization.

Respondents in emerging markets such as India (27%) and Nigeria (24%) agree that they are now offered more protection to blow the whistle in comparison to three years ago. However, more limited improvement has been seen in developed markets such as Italy (11%) and France (4%).

McCurry says: “For many companies, limited progress appears to have been made in providing an effective mechanism for highlighting wrongdoing. Employees are either unaware of the correct channels, or more worryingly, feel pressured to withhold information, which shows a lack of leadership from senior management to tackle the issue. Companies need to invest in effective whistleblowing channels and communicate appropriate processes to help ensure employees who witness wrongdoing know where to go.”

Appropriate monitoring of employees’ data important in preventing insider threat
The survey reveals a tension between the use of technology and the monitoring of employees’ private data. Seventy-five percent of respondents say their companies should monitor sources such as emails, calls or messaging services. Despite this, 89% feel monitoring data, such as instant messenger accounts, would constitute an invasion of privacy. When asked if they support the routine collection and analysis of their data from email, telephone, security systems or the public record, respondents from Western (42%) and Eastern (49%) Europe were less supportive in comparison to India (87%) and Africa (80%).

McCurry says: “The threat posed by employees is very real but remains difficult to detect without gathering and analyzing data from a variety of sources. By focusing on behavioral patterns and the use of unauthorized external storage devices, companies can identify individuals who may pose a higher risk.”

Alexei Kredisov, Managing Partner, EY Ukraine, co-chair of the Emerging Markets Center, EY Global, comments:

“Despite all the efforts that the country and its people are making to fight corruption, unfortunately, the number of respondents who believe bribery and corruption to be widespread in Ukraine is unacceptably high, at 88%. According to this criterion, our country ranked the lowest among all countries participating in the study.

Apparently, lack of economic growth and unfavorable business climate in our country, combined with the inefficient punishment system, can tempt business to violate the ethical standards. In order to help their companies survive at least 37% of respondents would offer cash payments to win or retain business.

Only 12% of the surveyed businesspeople would agree that the regulatory activity has had a positive impact on ethical standards in their company. At the same time, only one-third of respondents think that prosecuting individuals would help deter fraud, bribery and corruption by executives.

These are very alarming figures for the leadership of the country. Representatives of the legislative, executive, and judicial branches of government should observe such feedback from the business community and significantly increase measures to deter corruption. The “tone at the top” may not be enough. Visible actions and, most importantly, the “lead by example” principle must be applied. Establishing an independent court system and the avoidance of conflicts of interest between politics, public administration and business will be important components in fighting corruption”.

Bribery/corrupt practices happen widely in business in this country

Table shows percentage of respondents answering yes.

Rank 2017

Country

% 2017

% 2015

L4L Rank*

Rank 2015

1

Ukraine

88

80

1

7

2

Cyprus

82

N/A

N/A

N/A

3

Greece

81

69

2

12

4

Slovakia

81

78

3

8

5

Croatia

79

92

4

1

6

Kenya

79

90

5

2

7

South Africa

79

78

6

9

8

Hungary

78

73

7

10

9

India

78

80

8

6

10

Egypt

75

64

9

15

11

Slovenia

74

87

10

3

12

Nigeria

73

72

11

11

13

Italy

71

67

12

14

14

Bulgaria

68

N/A

N/A

N/A

15

Turkey

67

63

13

16

16

Russia

66

60

14

18

17

Spain

64

69

15

13

18

Czech Republic

63

61

16

17

19

Portugal

60

82

17

5

20

Serbia

57

84

18

4

21

Jordan

53

N/A

N/A

N/A

22

Latvia

51

55

19

19

23

Ireland

47

50

20

20

24

Lithuania

47

45

21

21

25

Germany

43

26

22

30

26

Saudi Arabia

43

44

23

22

27

Poland

38

43

24

23

28

Belgium

36

34

25

27

29

Austria

32

42

26

24

30

Estonia

32

21

27

33

31

Romania

31

39

28

25

32

France

28

29

29

28

33

UAE

27

24

30

31

34

UK

25

27

31

29

35

Netherlands

23

13

32

34

36

Oman

19

36

33

26

37

Sweden

18

10

34

37

38

Switzerland

18

12

35

35

39

Finland

16

11

36

36

40

Norway

10

21

37

32

41

Denmark

6

4

38

38

Source: EY EMEIA Fraud Survey 2017

*Average of all respondents: 2017 51%, 2017 L4L, 2015 51% (L4L = Like for Like – countries that were surveyed in both 2015 and 2017).

Notes to Editors

About the survey
Between November 2016 and January 2017, 4,100 interviews were conducted in 41 countries across EMEIA by Ipsos MORI on behalf of EY. The interviews consisted of both face-to-face and online interviews in local languages on an anonymous basis covering a mixture of company sizes, job roles and industry sectors. 100 interviews were conducted in Ukraine.

For the purposes of this survey, emerging markets are defined as including: Bulgaria, Croatia, Cyprus, Czech Republic, Egypt, Estonia, Hungary, India, Jordan, Kenya, Latvia, Lithuania, Nigeria, Oman, Poland, Romania, Russia, Saudi Arabia, Serbia, Slovakia, Slovenia, South Africa, Turkey, UAE and Ukraine. 

Developed markets are defined as: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the UK.

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

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’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, and 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.


1 Refer to table below for individual country breakdown – “Bribery/corrupt practices happen widely in business in this country”