48% of MidEast firms have no anti-corruption policy in place
Nearly half of Middle East businesses still do not have the basic building blocks in place for effective compliance to fight bribery and corruption, according to Ernst & Young (EY).
Only 52 percent of MENA respondents stated they had an anti-bribery or anti-corruption policy and code of conduct in place.
The MENA survey, which polled employees of large businesses in Saudi Arabia, UAE, Oman and Egypt, found that pressure on businesses to grow revenues, together with market uncertainty and geopolitical instability, is creating increased risk in expansion opportunities and day-to-day operations.
It said 52 percent of MENA survey respondents report that management is under pressure to expand into higher risk markets.
It added that 67 percent of MENA respondents said that they believed offering personal gifts, entertainment or cash were justified if it helped a business survive.
Michael Adlem, MENA leader of EY's Fraud Investigation & Dispute Services (FIDS) practice, said: "The risks of fraud, bribery and corruption are not going away. Businesses remain under intense pressure to grow and that growth can be achieved while appropriately managing the risks of fraud and corruption. Effective compliance is not a barrier to growth; it is a requirement for sustained success."
The survey also found that despite increasing international and regulatory pressure on business ethics and their connection to global and regional economic growth, 50 percent of MENA respondents justified financial statement misstatement if it helped the business survive.
Adlem said: "Changing the culture of compliance can take time, especially if companies have become accustomed to operating in the grey areas of business. Increased regulation and scrutiny will help to speed up this focus but there is still pressure to keep improving.
"Senior management need to continually assess the risks their businesses may be exposed to. These risks can be external, like cyber-attacks or money laundering, but also internal, including market manipulation or misreporting."
The survey also highlighted that just over half of respondents across MENA believed senior management has communicated strongly its commitment to ABAC policies or outlined clear penalties for breaking defined policies.