Building an ethical culture to minimise fraud, bribery and corruption

Here at the Bank of Australia, we recognise that culture is the biggest cause of fraud, and I want to ensure you understand how we can change this. Culture reflects the values that are shared by individuals in an organisation, and it can influence the decision to engage in fraudulent activities (Omar, Johari and Hasnan 2015, 368). Take Enron for example, which I discussed in my first blog post; one of the major causes of their collapse was the CEO and CFO’s role in creating an unethical corporate culture, where fraud was considered acceptable (Sims and Brinkmann 2003, 247).

When I was working in my first part-time job, some managers would come to work with a negative, disinterested attitude. This affected me and other employees on shift, as we lacked encouragement and motivation as a result, failing to meet our targets. Although this is on a much smaller scale than organisational fraud, it demonstrates how the tone from management flows through to all employees.

(Power of Ted 2014)

Companies continue to ignore the impact of culture, as they focus on internal control measures. Our CEO should use the Australian standard for Fraud and Corruption Control, AS 8001–2008, as an approach to control fraud, bribery and corruption in our company. It emphasises the need to build an ethical culture by implementing an integrity framework, and recognises the importance of senior management’s ‘observable adherence’ to set an example for employees (Standards Australia 2008, 25). As part of this framework, an Ethics Committee should be implemented, and all employees should receive ongoing ethics training. By developing an ethical culture in our organisation, this will help to minimise fraud, bribery and corruption.

(ACFE 2015)

Relevant Links
If you would like to read more about how to build an ethical culture in our organisation, you can do so here:
http://www2.deloitte.com/content/dam/Deloitte/us/Documents/risk/us-aers-corporate-culture-112514.pdf

References
ACFE. 2015. “Tone at the Top According to a Fraudster.” YouTube video, posted January 23. Accessed May 24, 2016. https://www.youtube.com/watch?v=bpg25Y57UYc.

Delloite. 2015. Corporate culture: The second ingredient in a world-class ethics and compliance program. Accessed May 24, 2016. http://www2.deloitte.com/content/dam/Deloitte/us/Documents/risk/us-aers-corporate-culture-112514.pdf.

Omar, Normah, Zulaikha Johari and Suhaily Hasnan. 2015. Procedia Economics and Finance 31: 367-372. Accessed May 15, 2016. doi: 10.1016/S2212-5671(15)01211-3.

Power of Ted. 2014. “Setting the Tone at the Top.” Image. Accessed May 24, 2016. http://powerofted.com/setting-the-tone-at-the-top/.

Sims, Ronald and Johannes Brinkmann. 2003. “Enron Ethics (Or: Culture Matters More than Codes).” Journal of Business Ethics 45(3): 243-256. Accessed May 15, 2016. http://link.springer.com.ezp01.library.qut.edu.au/article/10.1023%2FA%3A1024194519384.

Standards Australia. 2008. Fraud and Corruption Control. AS 8001–2008. Accessed May 15, 2015. http://www.saiglobal.com.