(MENAFN- Khaleej Times) Nearly half of businesses in the Middle East and North Africa (Mena) region do not have an anti-bribery or anti-corruption policy and code of conduct, a survey released on Tuesday shows.
EY's Europe, Middle East, India and Africa fraud survey has found that many businesses still do not have the basic building blocks in place for effective compliance. Only 52 per cent of Mena respondents stated they had an anti-bribery or anti-corruption (ABAC) policy and code of conduct in place.
The survey, which polled 3,800 employees of large businesses in 38 countries (400 in Mena, including Saudi Arabia, the UAE, Oman and Egypt), found that pressure on businesses to grow revenues, together with market uncertainty and geopolitical instability is creating increased risk in expansion opportunities and day-to-day operations.
For example, 52 per cent of Mena survey respondents report that management is under pressure to expand into higher risk markets, compared to 31 per cent across the EMEIA survey sample.
Michael Adlem, Mena Leader of EY's Fraud Investigation & Dispute Services (FIDS) practice, said the risks of fraud, bribery and corruption are not going away. "Businesses remain under intense pressure to grow and that growth can be achieved while appropriately managing the risks of fraud and corruption. Effective compliance is not a barrier to growth; it is a requirement for sustained success."
The survey also found that despite increasing international and regulatory pressure on business ethics and their connection to global and regional economic growth, 50 per cent of Mena respondents justified financial misstatement if it helped the business survive.
"Changing the culture of compliance can take time, especially if companies have become accustomed to operating in the grey areas of business. Increased regulation and scrutiny will help to speed up this focus but there is still pressure to keep improving. Senior management need to continually assess the risks their businesses may be exposed to. These risks can be external, like cyber-attacks or money laundering, but also internal, including market manipulation or misreporting," said Adlem. Kroll, a global leader in risk mitigation and response solutions, said in a report recently that global expansion is at the root of increased bribery and corruption risks.
In a survey of senior-level compliance professionals, 72 per cent of those who expect risks to increase say it is because their business will be expanding into new, unfamiliar markets. More than 50 per cent anticipate the bribery and corruption risks to their company will increase while 66 per cent automate their anti-corruption programme in some way. A majority (52 per cent) are not confident in their financial controls to catch potential books-and-records violations.
The EY survey also highlighted that just over half of respondents across Mena believed senior management has communicated strongly its commitment to ABAC policies or outlined clear penalties for breaking defined policies. However, 67 per cent of respondents added that they believed offering personal gifts, entertainment or cash were justified if it helped a business survive.
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