Ethical business practices do not merely constitute a legal or compliance issue but they also have a bearing on protection of company talents, consultancy firm Ernst & Young (EY) said in a report.
A survey showed that 78 percent of respondents in the region said that they would be unwilling to work for an organization if it was involved in bribery and corruption, EY said on Wednesday as it released its latest Asia Pacific (APAC) Fraud Survey.
In Hong Kong, the percentage of people who made such a claim was as high as 93 percent.
The EY perception survey is based on 1,508 interviews with employees of large companies in 14 Asia Pacific territories. About two third of the respondents are senior or middle management.
In a highly competitive labor market like the APAC, “it is already very difficult to recruit and retain staff,” Chris Fordham, APAC managing partner of EY’s fraud investigation unit, said at a media briefing in Hong Kong Wednesday.
The impact of fraud on an organization nowadays is broader than the traditional aspects of financial and reputation loss, he said.
Only five percent of the respondents said their willingness to work in a company will not be influenced by its reputation for business ethics.
As for internal governance, the survey showed that more companies have established codes of conduct and anti-bribery/anti-corruption policies, among other measures, to address this issue, compared with a similar study carried out in 2013.
However, the percentage of people prepared to use whistle-blowing hotlines fell to 53 percent from 81 percent in the 2013 survey. The decline appears to be due to increasing concern about insufficient legal protection or the lack of confidentiality for whistleblowers, Fordham noted.
Cyber attack risk is new to the survey this year. Jack Jia, partner of the fraud investigation unit, noted that awareness has increased, and that “the cyber threat risk has escalated to the board and CEO levels”.
The survey shows that nearly half of respondents, especially those in financial services and extractive industries, expressed concern about increasing risk of cyber-attacks over the next few years.
However, only 55 percent believe their organizations are fully prepared to protect themselves.
Jia said leveraging forensic data analytics could be a good way to tackle the issue.
He pointed out that some insurance companies, for example, have started testing big data tools to monitor sales malpractices and alert the management when risky or suspicious acts are discovered.
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