Many organisations in emerging markets are struggling to maintain integrity standards as they transition from managing the COVID-19 crisis toward building economic resilience, with 82 percent of respondents in India feeling more likely to be adversely impacted by the current disruption, according to a study by consultancy firm EY.
According to the 'EY Global Integrity Report — emerging markets perspective, is this the moment for emerging markets to prioritize integrity?', 63 percent of respondents in emerging markets say it is difficult for organisations to maintain standards of integrity during difficult market conditions.
Stating that pandemic-induced remote working and regulatory scrutiny are aggravating these issues, EY said 32 percent of respondents in emerging markets believe that bribery and corrupt practices present the greatest risk to the long-term success of their businesses, compared with 25 percent in India.
When it comes to the risk of a cyber and ransomware attack, 30 percent of respondents believe that it is a significant threat, compared to 41 percent in India.
In terms of management frequently communicating the importance of operating with integrity, the report said 55 percent of respondents in emerging markets felt their management did it as compared to 39 percent in developed markets.
"This proportion varies significantly by country from just 25 percent in UAE, rising to 53 percent in Malaysia and 66 percent in India," EY added.
Commenting on the findings, EY Partner and Head – India and Emerging Markets, Forensic & Integrity Services, Arpinder Singh said, "As organisations navigate the crisis and prepare for a 'Great Reset', corporate revival and recovery efforts should not get derailed by fraud, bribery corruption risks."
Business leaders should go beyond today's travails to review their integrity agenda and determine the next steps to bolster their risk and compliance programmes. Leadership commitment to foster a culture of integrity and trust amongst stakeholders will be pivotal to derive long term value and preserve an ethical future, Singh added.
The EY study found that emerging markets are embracing disruptive technologies and adapting to a digital life. There has been an overwhelming shift to using new technologies and increased use of internet with work from home, with which the risk exposure for organisations has amplified.
It, however, said emerging markets are leading the way in mitigating growing risks, with 55 percent offering training to employees on how they can prevent data security breaches, compared with 45 percent in developed markets.
"Organisational preparedness is also robust in emerging markets with 42 percent of respondents having an incident response plan in the event of a data security breach – regions such as South Africa were at 56 percent while India at 32 percent," the report added.
In terms of reporting concerns about integrity, the report said 37 percent of respondents in emerging markets said they haven't done so due to apprehensions about their career progression.
"Worryingly, nearly 3 in 10 kept their concerns private out of fear for their own personal safety. In India, 49 percent of respondents were uneasy to report such concerns," EY said.
The survey, which was conducted last year covered answers from over 1,700 executives from 21 emerging countries, including India, China, Kenya, South Africa, UAE and Malaysia.