Organisational exposure to bribery and corruption is on the rise, but many companies are either not recognising the risks, or failing to address them.
These are the findings of the inaugural Deloitte Bribery and Corruption Australia and New Zealand Survey.
It has found that managing bribery and corruption risk is set to become an increasingly important issue for organisations – particularly those with offshore operations.
But, according to the survey’s results, many organisations are ill-equipped to curb both national and international potential sources of bribery and corruption.
Key findings from the responses of nearly 400 Australian and New Zealand organisations include:
34% of organisations have operations in high-risk offshore jurisdictions, but 48% of these have never conducted a corruption risk assessment, and 21% do not discuss corruption risk at management or board level;
Only 25% of organisations with offshore operations have a comprehensive understanding of relevant anti-bribery and corruption legislation, while 40% said they are not concerned with risks arising from non-compliance;
14% of organisations that have never undertaken a risk assessment have experienced a foreign bribery and corruption incident in the last five years;
80% of organisations with offshore operations either do not regard foreign bribery and corruption as a high level risk to their business in the next five years, or said the risk was not applicable to their organisation.
While bribery and corruption appear not to be high on the corporate risk management agenda, Deloitte Forensic partner Barry Jordan says this needs to change.
“The landscape is clearly shifting. Engaging in corrupt behaviour because it is seen as the way business is done in some locations will no longer be tolerated as an excuse,” he said.
“Stakeholders, including governments, regulators, law enforcement agencies, shareholders and customers are demanding the strongest commitment to ethical business dealings.
“Ignorance and inactivity are no longer a defence, and failure to act exposes directors, senior executives and employees to increasingly serious sanctions.”
He added that agencies in New Zealand and Australia, as well as the United Kingdom and United States, were firmly focused on addressing corruption at the corporate level.
“Expect to see more attention given to exposing individuals and organisations who look to use corruption to advance their business,” said Jordan.