This is the second in a series of five extracts from EY’s EMEIA Fraud Survey 2017 – Human instinct or machine logic: which do you trust most to fight fraud and corruption? Visit ey.com/fraudsurveys/EMEIA to access the full version.
Faced with greater scrutiny from regulators than ever before, EY’s EMEIA Fraud Survey 2017 explores why organizations need to ask themselves how they can ensure that high ethical standards are maintained by a workforce that may be more motivated by personal gain than by loyalty to the company.
The results of our survey indicate that relaxed attitudes toward unethical behavior and high levels of mistrust among colleagues are common characteristics of today’s workforce, particularly among younger generations.
Respondents from Generation Y (25 to 34 year olds) are more likely than any other age group to justify unethical behavior to help a business survive, to meet financial targets and for their own career progression. Seventy-three percent of respondents from Generation Y feel unethical action can be justified to help a business survive, while 1 in 4 could justify offering cash payments to win or retain business, compared to 1 in 10 aged over 45.
Respondents from Generation Y are also less likely to trust their coworkers. While 2 in 5 survey respondents believe their colleagues would be prepared to act unethically to improve their own career progression, this rises to 49% among Generation Y respondents.
Strikingly 68% of Generation Y respondents also believe their management would engage in unethical behaviors to help a business survive. This generation is the future of our businesses. If companies do not take action now to combat unethical conduct at all levels of their organizations, such behaviors may increase in the future.
The survey also reveals a noticeable difference in perceptions between senior management and other employees about the effectiveness of communication around ethical standards. Almost half of all board directors and senior managers have heard such messages frequently compared to only 32% of their more junior colleagues. If messages around ethical conduct are not being heard across the business, how confident can organizations be that their employees are making the right choices?
Our survey finds that 77% of board directors and senior managers could justify unethical behavior to help a business survive, while 1 in 5 would deliberately misstate a company’s financial performance. These respondents are also more prepared to act unethically to improve their remuneration than their colleagues, with 2 in 5 willing to do so.
If senior management is not setting the right tone from the top and key messages are not getting through, what impact is this having on the wider workforce?
Visit ey.com/fraudsurveys/EMEIA to read the full version of EY’s EMEIA Fraud Survey 2017, and dig deeper into respondents’ views on ethical choices using EY’s new Interactive Results Comparison Tool.