More than nine in ten (93%) respondents to the EY Asia-Pacific (APAC) Fraud Survey 2017 want to work for a compliant organisation but are confused by inconsistent compliance policies that lack clarity and are clouded in legal jargon. In fact, 35% of Australian respondents believe their organisation’s current code of conduct has little impact on how employees actually behave. 

EY APAC Fraud Survey 2017 titled ‘Economic uncertainty/Unethical conduct: How should over-burdened compliance functions respond?’, surveyed 1,698 employees from large businesses in 14 Asia-Pacific territories. It highlights the calls from employees for corporate policies combating fraud, bribery and corruption to be simplified to ensure they are not only understood but also complied with.

Only 54% of APAC respondents believe their anti-bribery/anti-corruption (ABAC) policies are relevant and effective. In Australia, 26% of respondents would shorten their existing ABAC policies to ensure key messages don’t get lost and 23% would simplify the language so it wasn’t overly complicated or composed of legal jargon. 

The survey highlighted the significant impact ethical conduct has on hiring and retaining employees, with over three quarters (79%) of Australian respondents stating they would look for a new job if their organisation was involved in a major fraud, bribery or corruption case.

Chris Fordham, EY Asia-Pacific Leader, Fraud Investigation & Dispute Services, 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 ensure employees follow them.”

APAC risk of cyber-threats

Nearly half (47%) of the APAC survey respondents say there’s no particular company policy controlling how staff use personal devices for work-related activities at their organisations. This creates new vulnerabilities for organisations with almost half (49%) of respondents agreeing that they conduct business using their personal mobile devices, despite they may have been issued with a work mobile device, and 39% recognising that there are risks associated with using personal devices for work.

EY Oceania Managing Partner, Fraud Investigation & Dispute Services, Rob Locke said, “Asia-Pacific can no longer afford to be complacent when it comes to cyber-threats. Whilst companies often think of cyberattacks as external threats, they would be well advised not to ignore the very real threats posed internally.

“Current cyber policies are inadequate in safeguarding against rogue employees and criminals who are intent on stealing data, intellectual property and even cash. Given 40% of Australian survey respondents say they do not have a policy in place for using personal devices at work, companies must design and enforce policies that help mitigate the risk of both external and internal cyber-attacks.”

Economic targets trump ethical conduct

Slow economic growth coupled with growing pressure to exceed the business bottom line is taking its toll on Australia’s ethical conduct, with close to a third of Australian respondents (32%) believing bribery and corrupt practices have increased because of tough economic conditions and increased competition. Over a quarter of Australian respondents (27%) believe it is common practice in their industry or sector to use bribery to win contracts and 31% believe Australian companies often report financial performance as better than it is.  Alarmingly, 23% of Australian respondents believe there are no clear penalties for breaking their ABAC policies.

Whistleblowing hotlines underutilised by employees

Sixty-one percent of APAC respondents say they have a whistleblowing hotline within their organisation. But when it comes to reporting unethical acts, employees are reluctant to use the existing internal whistleblower hotlines as they do not trust their organisation will protect their anonymity or follow-up with proper remedial actions. Nearly a third (28%) say they would prefer to use external law-enforcement hotlines and even social media channels to report misconduct instead.

In Australia increased regulatory scrutiny and activity continues to have an impact on employee willingness to use whistleblowing hotlines, with 27% of Australian respondents stating they would be most comfortable reporting misconduct directly to their senior manager.

Despite the growing presence of whistleblowing policies, almost one in five (17%) Australian respondents have withheld information or concerns due to internal pressures.

Fordham says: “It’s encouraging that more companies in Asia-Pacific now have whistleblower hotlines. But we’re concerned that employees still 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”.

The full report is available here.