May 25th, 2012
08:03 AM GMT
(CNN) – Despite the financial crisis and the implosion of businesses like Enron over shady business practices, senior executives are now more likely to pay bribes to win business, according to a survey by Ernst & Young.
Of the nearly 400 CFO’s polled from November to February, 15% would make cash payments to win or retain business – up from 9% two years ago.
In the 12th Global Fraud Survey, more than 1,700 executives – including CFO’s and leaders in legal, compliance and internal auditors – across 43 countries were polled for their views on corruption.
Over a third of the respondents believe corruption occurs frequently in their country. Bribery or corrupt practices are believed to be even bigger in rapid-growth markets, survey respondents said. In Brazil, 84% of executives said corruption was widespread.
“Growth and ethical business conduct in today’s markets can appear to be competing priorities,” said David Stulb, Global Leader of Ernst & Young’s Fraud Investigation & Disputes Services practice, in a news release. “Our findings show that, as businesses continue to pursue opportunities in new markets, many executives are underestimating the risks.”
Entering a new market requires local contacts and third-party agents, which adds greater risk to violating corruption and bribery laws, the survey reports.
Regulations exist to counteract these challenges in growing markets, such as the UK Bribery Act or the U.S. Foreign Corrupt Practices Act (FCPA). In 2011, the majority of reported FCPA cases involved activities in Asia, Eastern Europe and Latin America, the survey says.
Bloomberg reports that in the U.S., companies since 2008 have been fined a total of $3.9 billion in 50 corporate foreign bribery cases.
However, Ernst & Young’s fraud survey said that companies lack effort to prevent bribery and corruption. Among the respondents, 81% said their company had anti corruption policies. But almost half said they do not believe people have been penalized for violations.
Forty two percent had not received any training on such policies, the survey said.
“For businesses to seize new opportunities, boards need to ensure that the right tone is set not just at the top, but at all levels and in all markets,” Stulb said in the news release.
About Business 360
CNN International's business anchors and correspondents get to grips with the issues affecting world business, and they want your questions and feedback.