The widespread disruption in operations and supply chains across sectors due to covid-19 may open a Pandora’s box of ethical issues for corporates in India, according to EY’s Global Integrity Survey 2020, published today.
As per the survey, 98% believe that covid-19 induced disruption poses a risk to ethical business conduct. Around 76% feel maintaining integrity standards in the current market conditions will be a challenge for organizations, while 92% said they would be concerned if information on management decisions were put to public scrutiny.
More than one third of the respondents opined that unethical behaviour will increase even further.
The survey further shows that 69% of Indians believe that there are managers in their organisation who would compromise integrity for short-term financial gain. Globally, 43% participants felt that way.
Around 57% said they would act unethically to improve their career prospects or remuneration package. Around 32% said they will falsify customer records if required, 31% would ignore unethical conduct by others and 29% would lie to management.
“Covid-19 struck the business ecosystem to its core, propelling management to deal with operational distress and business continuity with urgency. As tough decisions are being taken amid the crisis, the risk of unethical behaviour and compliance infractions has increased and can weigh heavily on organizations,” an EY statement quoting Arpinder Singh, partner and head, India and emerging markets, forensic and integrity services, said.
Covid-19 has increased the risks of data breaches, especially for organisations with poor security posture, and which were not prepared for large-scale shift to remote working at a short notice.
According to the EY survey, 36% feel cyberattacks pose big risk to the long-term success of an organization.
Only 56% organisations train employees as per the international standards of data privacy and only 32% had incident response plan in case of a data breach while 47% regularly conduct data security audits of their supply chain partners.
Around 68% feel data protection and privacy legislations are barriers to the success in business.
Mergers and acquisitions can also exacerbate ethical challenges, the survey shows as only 37% conduct detailed background checks on promoters or key management personnel. Further, only 31% perform compliance or integrity related reviews during acquisitions, while only 26% conduct bribery and corruption reviews of the organisation they are acquiring.
The EY survey was carried out in two phases. In the first phase, held in Jan-Feb, 2,948 interviews were conducted. The participants included board members, senior managers, managers and employees of largest organizations and public bodies in 33 countries including the US, the UK, India, China, Germany and Italy. In the second phase, held in April, 600 more interviews were conducted.