'More executives resort to unethical practices'
TOUGHER economic climes are enticing more executives into cutting corners, a new survey has revealed.
Ernst & Young's 2012 Global Fraud Survey noted that South African and African executives showed a greater propensity to use entertainment or personal gifts to retain or win business, while support for bounty schemes to encourage whistle-blowing was high in the country.
The global appetite for increased supervision by regulators is, however, mirrored in SA.
A poll across 1700 executives at leading companies around the world showed that 15% of senior executives were willing to make cash payments to win or retain business, up from 9% in 2010.
Over a third of the global respondents believed corruption was widespread in their country, and the situation was significantly worse in rapid-growth markets like Brazil (84%), Nigeria (72%), Turkey (52%) and SA (64%).
While only 2% of executives in SA would be willing to pay cash to win or retain business during an economic downturn, down from 16% in 2010, a higher percentage would be prepared to use entertainment to win-retain business (42%, up from 18% in 2010) and personal gifts (14%, up from 6% in 2010).
"These figures show that SA executives appear to have changed their minds about the kind of unethical behaviour they would countenance in order to ensure their companies' survival," said Sharon van Rooyen, director, fraud investigation and dispute services at Ernst & Young.
"More worrying, only 36% of SA respondents felt that unethical practices could be justified to help a business survive an economic downturn: a significant drop from the 64% in 2010 that took the same principled stand."
On a positive note the survey clearly showed that African respondents were committed to combating corruption, with the processes in place to monitor anti-bribery compliance broadly on a par with (or even higher than) those in the rest of the world.
Africans also show a keen appetite for increased supervision by regulators (72% in SA as compared with 69% globally) and strong support for "bounties" for whistle-blowers along the lines proposed by the Dodd-Frank Act. Of the South African respondents, 78% (79% in Africa overall) would support such a scheme, as compared with 52% globally.