One in seven prepared to engage in back handed business

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New research has suggested that UK businesses are not prepared for the Bribery Act, suggest a new European fraud survey by Ernst & Young’s 2011 European fraud which found that one in seven employees at large UK companies are prepared to secure business in exchange for cash payments.

Despite the Bribery Act being due to come fully into force on 1 July, the research found that ‘there is a persistently high level of UK employees willing to behave unethically’. In addition to the significant minority prepared to offer cash payments outlawed under the Act, around one in six would offer personal gifts or services to win business.

However, on the positive side, 72% of UK management surveyed said they are not prepared, under any circumstances, to offer bribes to win business. This is far above the overall European average of 51%.

The survey of more than 2,300 employees at all levels across 25 European countries found that the majority of UK companies remain unprepared for the new legislation. Little more than half of UK respondents are aware of an anti-bribery policy at their company, while only 26% of respondents have personally received anti-bribery training compared to just 17% in France and 15% in Germany.

This is despite the fact that communication and training is one of the six principles of adequate anti-bribery procedures set out by the Ministry of Justice in its UK Bribery Act guidance.

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, lower than the proportion in France (76%) and Germany (78%).

John Smart, Fraud Investigation and Disputes Services leader for Ernst & Young in the UK and Ireland, said:
“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.”

He added:
“The survey provides a timely reminder for all UK companies. A declining focus on anti-fraud measures and a lack of understanding regarding the processes, structures and training around bribery dramatically increases the risks of bribery at a time when it has never been higher on the UK business agenda.

“Management teams are committed to anti-bribery – which is great – but while the head is willing, the flesh may be weak, as the training, guidance and understanding of bribery risks across companies just isn’t there. Reinvigorating the commitment by management and their boards to provide appropriate training, processes and structures should become an urgent priority, and will certainly be appreciated by all employees and stakeholders alike.”

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