- 55% of respondents believe standards of integrity have either stayed the same or worsened in the last 18 months
- 41% of respondents and 54% of board member respondents say that the COVID-19 pandemic makes it more difficult to carry out business with integrity
- A record 97% of respondents agree it is important that their organization demonstrates corporate integrity
More than half (55%) of employees and leaders from companies around the world believe that standards of corporate integrity have stayed the same or worsened over the last 18 months, according to the 2022 EY Global Integrity Report (pdf).
While a record (97%) respondents to the survey agree that integrity is important within their organizations, 41% say that the COVID-19 pandemic is making it more difficult to act with integrity in business dealings.
The survey, which canvassed the views of more than 4,700 employees, managers and board directors from 54 countries and territories, found that leaders are struggling to create and communicate a strong and effective culture of integrity within their business.
Andrew Gordon, EY Global Forensic & Integrity Services Leader, says:
“The COVID-19 pandemic has had a serious impact on integrity standards for companies around the world. The change to ways of working throughout the COVID-19 pandemic has created a heightened risk of fraud and unethical behavior. Hybrid working makes it difficult to undertake effective compliance monitoring, and fraud risk factors typically increase at a time of crisis because companies and individuals face more financial pressures.”
Growth in compliance programs, yet failure to address unethical behavior
In the last 12 months, there has been greater investment in integrity and compliance initiatives: 53% of responding organizations have a code of conduct in place, compared with 47% 18 months ago. There is also an uptick in training programs, with 46% of businesses providing regular training on relevant legal regulatory or professional requirements, compared with 38% in 2020.
However, the survey highlights that this increased investment is not being communicated effectively and senior management is often over-confident in the effectiveness of its corporate integrity programs. For example, while 60% of board member respondents say that their organization has communicated the importance of behaving with integrity frequently in the last 18 months, less than a third (30%) of employee respondents remember seeing any communications on the topic.
There is also a gap between the views of board members and employees in relation to awareness of policies on working from home (80% vs. 51%) and awareness of training on data privacy regulations (52% vs. 35%).
Gordon says:
“Although organizations are investing more in communication and training programs, this is not enough. There is a worrying divide between investment in action and genuine change. A strong culture of integrity is vital, and businesses must review what is working and where there are issues to address.”
Along with a lack of awareness, there appears to be limited understanding of the critical importance of integrity, beyond compliance with rules and regulations. Only a third (33%) of respondents say that an important characteristic of integrity is behaving with ethical standards.
Ethical behavior – an internal disconnect
The survey highlights a further disconnect when it comes to behavior. There appears to be a willingness among the most senior executives to act outside the compliance rules. Board members who were questioned as part of the research were five times as likely as employees to falsify financial records (15% vs. 3%) and six times as likely to say they would be willing to mislead external third parties such as auditors (18% vs. 3%).
Gordon says:
“A progressive integrity agenda goes beyond frameworks and policy – businesses must look beyond box ticking and focus on creating an integrity culture at all levels within their organizations. Leaders should be under no illusion that integrity is an easy fix; however, the first step is setting the right tone from the top.”
Building compliance programs that are fit for purpose
The survey also looks at respondents’ views around data protection and privacy. Regulation in these areas has been the focus of new legislation over recent years and 61% of respondents agree that this is beneficial for business.
Gordon says:
“The business landscape has evolved beyond recognition in the last two years and there are many new challenges that leaders must address. Managing data integrity in a hybrid world creates new risks; and businesses must adapt their processes in line with these risks.
“The bottom line is that even the best compliance frameworks can be breached if there isn’t a culture of doing the right thing. Providing training programs that are effective and memorable is one key element of changing future conduct and behaviors to establish a culture of integrity. It’s people, not systems, that are ultimately responsible for fraud. That’s why building a strong culture of integrity is just as important as putting policies in place.”
For more information visit: ey.com/forensicsglobalintegrityreport2022
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Notes to editors
About EY
This news release has been issued by EYGM Limited, a member of the global EY organization that also does not provide any services to clients.
About EY Forensic & Integrity Services
Embedding integrity into an organization’s strategic vision and day-to-day operations is critical when managing complex issues of fraud, regulatory compliance, investigations and business disputes. Our international team of more than 4,000 forensic and technology professionals helps leaders balance business objectives and risks, build data-centric ethics and compliance programs, and ultimately develop a culture of integrity. We consider your distinct circumstances and needs to assemble the right multidisciplinary and culturally aligned team for you and your legal advisors. We strive to bring you the benefits of our leading technology, deep subject-matter knowledge and broad global sector experience.
About the survey
Between June and September 2021, researchers — the global market research agency Ipsos MORI — conducted 4,762 surveys in the local language with board members, senior managers, managers and employees in a sample of the largest organizations and public bodies in 54 countries and territories worldwide.
