BrazilGCC corporates struggle to root out bribery and corruption
Despite the fact that bribery and corruption continue to grow across the Middle East, senior decision-makers at GCC corporates warn that their organisations are not doing enough – or are simply not effective enough in – rooting out the phenomenon.
According to the World Economic Forum (a global economic think-tank), the global cost of bribery and corruption is “at least 5 per cent” of the globe’s gross domestic product, meaning that the damage instilled from such illicit business behaviour currently stacks up to a massive $2.6 trillion.
In the Middle East, the issue is relatively speaking potentially larger, with a new report from Kroll finding that 97% of risk leaders in the Gulf Cooperation Council (GCC) believe that corruption and illicit activity are having a “significant impact” on their organisation. Globally, the average sits at 82%.
Half of GCC respondents cited weaknesses in record-keeping as their biggest concern, with the other respondents equally split between lack of visibility over external third parties and individual behaviour by employees.
“Bribery and corruption threats are still having a marked and detrimental impact on organisations in the region. Poor record-keeping or the inability to adequately monitor frontline teams and regional offices are typical vulnerabilities that are often overlooked,” explained Amine Antari, Head of Middle East at Kroll.
One reason for the relative high degree of bribery and corruption stems from insufficient investment and leadership focus. Only 53% of respondents in the GCC said their organisations gave bribery and corruption risk the attention and investment it deserved at board level, compared to a global average of 72%.
On both enterprise-wide risk assessments and the use of proactive data analytics, two key levers to identify and monitor bribery and corruption, GCC organisations trail the global average.
However, Antari added that pumping more money into the topic and establishing a rigorous governance is just one part of the equation. “Companies can have the best possible compliance program in place on paper, but if the human elements of the chain aren’t well managed, educated or equipped to act, non-compliance or illicit behaviour will continue to prevail and go undetected.”
Kroll’s Global Fraud and Risk Report surveyed over 1,300 senior decision-makers for risk strategy, including general counsels, chief compliance officers, chief finance officers and CEOs at corporates in 17 countries.
