One in two Cypriot executives consider bribes justified

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By Stelios Orphanides

Accounting firm Ernst & Young (EY) said that while almost half of Cypriot executives view kickbacks as a legitimate means for the survival of a company, the percentage of those who believe to have fallen victim of to fraud in the past two years was below the global average.

The percentage of companies that said they fell victim to fraud was 4 per cent in Cyprus compared to an average of 11 per cent, EY said citing the findings of its 15th global fraud survey which interviewed 2,550 executives from 55 countries, including 25 in Cyprus.

The survey concluded that while 38 per cent of interviewed executives consider “bribery and corrupt practices prevalent in business,” the percentage of Cypriot executives who had the same opinion was 80 per cent, down from 82 per cent last year, EY said. This was the sixth-highest among the surveyed countries and followed that of Brazil, Colombia, Nigeria, Kenya and Peru.

The percentage of Cypriot interviewees who said that bribery was common when it came to winning contracts was 52 per cent, almost five times as high as the survey’s average of 11 per cent, catapulting Cyprus to the top of the list, EY said. Again, 44 per cent of the participants said that in times of crisis, when the survival of the company was at stake, paying kickbacks was justified.

In addition, while eight in ten Cypriot executives said their organisations had a policy to penalise misconduct, only 44 per cent said they were aware of related measures being taken, EY said.

“Integrity sits high on the board agenda, the survey finds, with 96 per cent recognising the importance of their organisation being seen to operate with integrity,” EY said. “The findings show that 64 per cent of respondents from Cyprus feel that management is responsible for ensuring that employees behave with integrity while none of those who participated in the survey believe that acting with integrity is an individual’s responsibility. Organisations need, therefore, to make it clear that acting with integrity is everyone’s responsibility, and while that includes the importance of management setting the right ‘tone from the top’, it also involves individual employees”.

Bribery scandals that erupted in recent months may explain the negative perception of the interviewed Cypriot executives, said EY Cyprus country managing partner Stavros Pantzaris.

“The imposition of hefty penalties and long prison sentences will serve as a deterrent, although the aim should be a drastic culture change so that business people behave ethically not because they fear the consequences of non-compliance but because it is the right thing to do,” he said.

“The lack of improvement in global levels of corruption over the last six years shows that unethical behaviour in business remains a daunting challenge, despite intensified global enforcement,” said EY’s global investigation & dispute services leader Andrew Gordon. “While corruption remains so prevalent, businesses remain vulnerable to significant financial and reputational harm”.

Gordon encouraged management teams to identify and address the roots of unethical behaviour in an organisation and keep their compliance programmes up to date with technology amid an increasingly complex risk environment.

“More robust risk management should be considered a strategic means of improving business performance,” he said.

With respect to European Union’s General Data Protection Regulation (GDPR) which comes into force on May 25, EY said that 56 per cent of Cypriot respondents were familiar with the matter, compared to 40 worldwide and 65 per cent in Western Europe.

 

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About Author

Stelios Orphanides is a journalist at CyprusBusinessMail.com. To contact Stelios Orphanides: [email protected]

  • SuzieQ

    “Integrity”– what does that mean?

    • Cydee

      I think Big Business has its own, unique interpretation…

    • Douglas

      They think integrity is the same as insestuous 🙂

      • A is B

        I thought they were safety belts………..

  • Eye on Cyprus

    “One in two Cypriot executives consider bribes justified.”
    The other one in two Cypriot executives lied when asked if they consider bribes justified.

    • SuzieQ

      Naughty, but true!

  • Philippos

    ..and the justification is clearly the survival of companies who have no economic justification for survival. Remove the problem by removing those companies, strike them off and close them down. Same as Agia Napa, get rid of the noisy yobs by removing their accommodation and replacing it with more expensive upmarket accommodation. Won’t happen because every Cypriot is entitled to make a living in tourist businesses no matter how horrible they are (The businesses not we Cypriots)

  • martin

    one in two, is someone trying to wind me up ,we all know the true figure is one in one.

  • JS Gost

    Pretty much sum up why we are so screwed.

  • Costas Apacket

    Almost half…..yeah right!

  • Alex

    As a Cyprus Executive all I can say is – claptrap.

    A survey on corruption is about as honest as a politician’s promise………

  • Rory Keelan

    Speaks volumes. However they should have also asked ‘do you believe you can get a government contract without paying a bribe?’ I suspect the NOs would have it by a mile.

  • Rory Keelan

    No bribes here – only FFs (facilitation fees).

    • GSP

      And “commissions”. Don’t forget the most common of all.

  • clergham

    As soon as I learned that solicitors here allowed their clients to buy properties subject to a huge existing mortgage, I knew the culture of this place was steeped in criminality and corruption, affecting even the law itself, rivaling even the most benighted state in black Africa

  • GSP

    And in another CM article, three months ago, (Feb 21st ) we read:
    “Global anti-corruption watchdog upgrades Cyprus’s rating”.
    How much was paid for the watchdog to produce that report?