Nearly half (48 per cent) of businesses in the Middle East and North Africa (Mena) region do not have an anti-bribery or anti-corruption policy and code of conduct in place, according to a recent survey.

The EY’s Europe, Middle East, India and Africa (EMEIA) Fraud Survey, ‘Fraud and corruption – the easy option for growth?’, found that many businesses still do not have the basic building blocks in place for effective compliance.

The survey, which polled 3,800 employees of large businesses in 38 countries (400 in Mena, including 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.

Michael Adlem, Mena Leader of EY’s Fraud Investigation and 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, about 50 per cent of Mena respondents justified financial statement misstatement if it helped the business survive.  

“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,” said Adlem.

“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,” he said.

Meanwhile, it highlighted that just over half of respondents across Mena believed senior management has communicated strongly its commitment to attribute-based access control (ABAC) policies or outlined clear penalties for breaking defined policies.

However, 67 per cent of Mena respondents added that they believed offering personal gifts, entertainment or cash were justified if it helped a business survive, it said.

Stuart Jones Jr, executive director, Mena FIDS, EY, said: “There is an urgent need at the board level to make compliance more of a focus.  The survey points out that MENA businesses are still not protecting themselves enough and  generally there is a long way to go in making compliance an integral part of operations. This shouldn’t be the case.

“To grow in a high-risk market, the right controls and processes need to be in place, independently tested and teams should be trained to make the correct choice.” - TradeArabia News Service