Survey Reveals Effects of Bribery, Corruption on Businesses

By Obinna Chima

Despite sporadic progress in tackling bribery and corruption across Europe, the Middle East, India and Africa (EMEIA), 51 per cent of respondents to the biennial EY (Ernst &Young) EMEIA Fraud Survey still perceive the problem to be widespread in their countries.

According to the survey, 27 per cent of all respondents stated that it was common practice in their business sector to use bribery to win contracts.

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 including Nigeria.

It revealed that senior management were failing to foster a culture of ethical behaviour, stating that 77per cent of board directors or senior managers said they would be willing to justify some form of unethical behaviour to help a business survive, with one in three willing to offer cash payments to win or retain business.

Nevertheless, 28 per cent of respondents believed that regulation has had a positive impact on deterring unethical behaviour, an increase of four percentage points from the 2015 survey, with 77 per cent of respondents agreeing that the prosecution of individuals would help deter fraud, bribery and corruption by executives.

Respondents in emerging markets such as India (27%) and Nigeria (24%) agreed 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%).

EY EMEIA Fraud Investigation & Dispute Services Leader, Jim McCurry said: “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.”

According to EY West Africa Forensic/Fraud Investigation & Dispute Services Leader, Linus Osita Okeke, “the importance of tone at the top and tone from the top cannot be over-emphasized. Such tone certainly drives the tone at the middle and the top at the bottom.

“Board members and senior managers must have to walk the talk if they desire to foster an ethical environment. Business leaders should constantly question themselves on what they are doing to build a better working world.”

Also, Okeke opined that “fear for personal safety continues to be an important factor or disincentive for people who are aware of wrongdoing to turn a blind eye and not report the incident.”