Levels of bribery and corruption in emerging markets still twice that of developed markets and 20% of respondents under the age of 35 would justify cash payments to win or retain business, the survey found.
The scale of bribery and corruption has shown no improvement globally since 2012, despite the unprecedented level of enforcement activity and the introduction of new corporate criminal liability laws in that time. This is according to the 15th EY Global Fraud Survey, which surveyed 2,550 professionals across 55 countries.
The survey found that despite regulators and law enforcement agencies around the world imposing more than $11 billion of financial penalties since 2012, 38% of global executives still believe bribery and corrupt practices remain prevalent in business.
The difference in levels of corruption between countries remains significant, with 20% of respondents in developed markets indicating that bribery and corruption occur widely in business, compared with more than half (52%) of those in emerging markets.
According to the survey results, Romania is currently placed below the average of all markets with 34%. It should be noted that the perception decreased from 36% in comparison to prior year’s survey results but still far from the average of developed countries’ score of 20%.
“The survey has been capturing the response of Romanian participants for the last 6 years and there were visible improvements in the perception of corruption in the country. Romania is a great case study for EU on how institutional measures would address the country’s concerns on corruption,” said Kenan Burcin Atakan, leader of Fraud Investigation and Dispute Services (FIDS) in EY Romania.
Regions in which corruption risks were higher than the global average included Central and Eastern Europe (47%), the Middle East (62%) and Latin America (74%), despite improved anti-corruption legislation and more active enforcement in some countries.
Integrity sits high on the board agenda, the survey finds, with 97% recognizing the importance of their organization being seen to operate with integrity. Although improved customer perception, staff retention, and business performance were all seen as benefits of demonstrating integrity, there remains a mismatch between intentions and actual behavior.
While 13% of respondents say they would justify making cash payments to win or retain business, this rises to 20% among those that are under the age of 35 years old.
The findings show that 22% of respondents feel that individuals should take primary responsibility for their organization behaving with integrity, while 41% say it is management’s primary responsibility.
Seventy-eight percent of respondents believe their organizations have the clear intent of penalizing misconduct, but only 57% are aware of people having actually been penalized.
The new EU General Data Protection Regulation (GDPR) already had and will continue to have a meaningful impact on every organization which collects, processes, uses and stores EU citizens’ personal data as part of their daily business activity. As such, the companies should not only be aware of the GDPR provisions, but deeply understand them, along with the new rights which the data subject will have, by following a holistic model and strategy, focusing on the following areas: regulatory compliance, domestic and international legal environment, as well as IT security.
When asked how well their companies know the GDPR provisions, 38% of the Romanian respondents replied positively. This level of awareness is close to the global average of 40% but still less than developed countries’ and Central and Eastern Europe average of 54% and 42% respectively.
“Romanian business is not yet ready to comply with GDPR. While Financial Institutions in Romania and large companies took action for addressing the new legislation, local businesses should reconsider their standpoint as of today, less than a month prior to the enforcement,” said Atakan.
As a result of market digitalization and the amazingly fast technological development, companies continue to face an ever-increasing number of cyber-attacks, initiated either by individual attackers or organized crime and terrorist groups. When breaches occur, they may have a highly disruptive impact on operations, potentially resulting in higher operating losses and generating compliance concerns from a GDPR perspective.
The participants to the survey position cyber-attacks as the second greatest risk for business after the macroeconomic environment, with 38% positive answers.
“The digitalization of business, combined with poor investments in security can expose companies to huge losses when it comes to fraud,” Atakan said.