South African corporate ethics 'worrying'

Fraud a major problem for businesses

Economic crimes in South Africa businesses are on the rise according to a report by Business Unity South Africa (Busa), causing the chairperson of an ad hoc committee on corporate governance to express concern at the poor state of workplace ethics in South Africa.

"We don't have a healthy ethical environment (in business) at the moment,” said ruling African National Congress Member of Parliament Barbara Hogan.

The report showed that 68 per cent of 237 companies surveyed this year expected an increase in fraud (which includes various economic crimes such as bribery and corruption) going forward while 64 per cent considered fraud a major problem.

A 2002 Busa survey of 53 companies found inadequate ethics education and training as well as poor maintenance of a theft-free environment.

The survey also found that 25 per cent of management and 33 per cent of staff were not aware of codes of ethics in the workplace and that whistle-blowing hotlines were established in less than 50 per cent of companies.

Recently there has been a move away from plea bargains with white-collar criminals that allow them to return stolen funds in exchange for not going to jail. Companies were instead taking the losses and insisting on justice against perpetrators.

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