Impact of Fraud, Bribery and Corruption on Talent Crisis in Asia Pacific

August 18, 20158:04 am1246 views

Considering the ongoing talent crisis in Asia Pacific and world over, it is more than important for organisations to stay away from bribery, corruption and fraudulent practices that drive away potential new talent or cause the best employees to choose quitting, leading to higher attrition rates.

According to APAC Fraud Survey 2015 by EY, reveals a compelling new reason for executives and boards to revisit their fraud, bribery and corruption risk mitigation strategies. Nearly 80 percent of the 1,500 respondents surveyed say, they would be unwilling to work for organisations involved in bribery, fraud and corruption.

To avoid putting valued talent and growth strategies at risk, companies in Asia Pacific will need a holistic fraud prevention and detection framework — backed by strong leadership, with up-to-date and well-enforced internal controls, policies and procedures. Organizations also need to improve the way they handle whistleblower hotline complaints.

Across APAC, compliance has never been more challenging than it is today, companies need to ensure that they have high ethical standards and use technology proactively to prevent and detect fraud, bribery and corruption. This will be the key to talent retention and make compliance programs more sustainable.

See: Benefits Cost Management in Asia Pacific: Value Perception among Employees

At the same time the talent pool for qualified compliance professionals is limited. Discussions with heads of compliance in various industries indicate teams across APAC are finding it hard to recruit and retain compliance professionals.

To ensure compliance is sustainably maintained, companies should stay off fraudulent practices and, organisations should initiate call to action. This requires:

  • Strong ethical leadership at the top: There is a strong link between ethics and talent retention. This introduces a major new benefit to fraud, bribery and corruption risk management, especially for organizations with people at the core of their growth strategies. Running an ethical business is now central to attracting and retaining top talent.
  • Compliance on top priority. Leadership must engage proactively in compliance activities, and demonstrate and communicate about ethical behaviour. Executives must ensure the organization reacts quickly and effectively to any policy breaches, and support investment in compliance technology and training.
  • Need for effective anti-bribery/anti-corruption (ABAC) policies: Companies need to tighten their internal controls to ensure that ABAC policies are strictly adhered to and codes of conduct are followed. Simply having ABAC policies and codes of conduct is not enough — these policies must also lead to behavioural change. Turning policies into reality comes down to relevance. Employees need to understand what is required of them and believe it is important.
  • Third-party due diligence: Given the vast majority of fraud practices initiated by third-party intermediaries, organisations are required to improve their due diligence and monitoring of third-party services, which pans out to joint-venture partnerships and M&As, wherein its required that right questions are asked and diligence is targeted throughout the process.
  • Whistleblower hotlines: Every company needs a whistleblower hotline as part of a broader fraud, bribery and corruption risk management framework. However, implementing a hotline is not enough. Employees must also be confident that their reports will be dealt with in a transparent and confidential manner and they will be protected from retaliation.

In conclusion

The answer to increasing regulatory enforcement and stretched in-house compliance teams lies in leveraging big data through forensic data analytics (FDA), as well as involving the entire C-suite in preparing for a possible cybercrime incident.

Global organizations should be open to feedback from local offices on the challenges of dealing with changes to policies and procedures. Companies should be wary of policy documents that are exceedingly long. Wording should be in plain language, where possible avoiding legal terminology, which would be unfamiliar to many local employees.

Also read: How can HR Managers Become Workplace Heroes?

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