Companies unprepared for Bribery Act

One in seven employees polled at large UK companies are prepared to offer cash payments to secure business, and little more than half are aware of an anti-bribery policy at their firm.

One in seven employees polled at large UK companies are prepared to offer cash payments to secure business, and little more than half are aware of an anti-bribery policy at their firm.

‘Ernst & Young’s 2011 European fraud survey’, which asked more than 2,300 employees from the factory floor to the C-suite, across 25 European countries, found that most UK companies remain unprepared for the new legislation, with compliance programmes significantly underperforming.

The survey also found that UK respondents continue to report a challenging business and economic environment, and feel under more pressure than ever to reduce costs (77% up from 72% in 2009).

Overall, 50% of UK managers admitted that they are likely to cut corners to meet their targets. While this is high, it is lower than the proportion in France (76%) and Germany (78%).

John Smart, Fraud Investigation & Disputes Services leader for Ernst & Young in the UK & Ireland, says: “Our survey findings should cause concern among company directors in the UK. A lack of understanding about fraud, bribery and corruption among all employees, combined with intense cost-cutting initiatives at many companies, will no doubt create additional exposure to bribery and fraud risks.”

Some comfort for the UK, however, can be found in the 72% of UK management who are not prepared, under any circumstances, to offer bribes to win business. This is far above the overall European average of 51%.

The UK Bribery Act, due to come into force on 1 July, increases demands on all companies with UK operations to re-evaluate their ethical guidelines and understand the risk of bribery.

The introduction of the Act is timely given that 71% of UK respondents want to see increased supervision by regulators, compared with 86% in France and 58% in Germany. And 72% in the UK think that offering rewards to incentivise employees coming forward with information will encourage whistleblowing, more than the 54% in both France and Germany.

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