SINGAPORE - Singapore is well-known worldwide for being graft-free and having a zero-tolerance stance towards corruption, but this reputation may not be entirely deserved when it comes to businesses.
According to a new report published by global corporate law firm Eversheds, 86 per cent of board-level executives in Singapore have found instances of bribery or corrupt business practices within their organisations.
Of these, only about a third (35%) took the decision to self-report to law enforcement agencies, while about two in five (42%) said that they informed regulators.
More worrying, however, is the revelation that more than half, or 56 per cent, of Singapore board members admit that their companies' anti-corruption policies are do not work effectively.
The report, titled "Beneath the Surface", is based on discussions with over 500 board-level executives in large organisations across 12 countries to find out how businesses are respoding to corruption in their organisation. 50 Singapore firms participated in the research.
According to the report, all Singapore respondents understood the seriousness of corruption and felt that it was an important issue for their business. Yet, the findings show that many are failing to back it up with adequate compliance programmes to prevent, monitor and manage corrupt behaviours.
Less than a third (28%) of board-level executives said that they actually understood their anti-bribery policies, and even fewer (4%) felt that had undertaken enough anti-bribery training.
The report also highlighted an apparent clash between an organisation's commercial objectives and its ethical intentions when it comes to addressing bribery.
Three quarters (76%) of Singapore executives said that their anti-corruption policies made it more difficult to grow their business, while three out of ten admitted that their business does not conduct anti-bribery due diligence as part of merger and acquisition (M&A) activity.
Meanwhile, hardly any (2%) Singapore board-level executives identified potential legal ramifications as the main reason for why corruption is an important issue. Instead, most cited the impact on commercial success or potential reputational damage to their business when asked about its significance.
Commenting on the findings, Ms Leonie Tear from Eversheds' fraud and investigations group in Asia, said that few Singapore executives in the study see potential prosecution as the most important risk has implications for the Government's anti-bribery strategies.
"Governments have typically tried to fight bribery by deterring companies with stringent penalties, but they need to work with the private sector to articulate the business case for anti-bribery," she said.
She added that the challenge for Singapore businesses is ensuring that their anti-corruption approach is commercially sensible. "This means less reliance on policies and greater focus on creating the right culture and environment in which sound business practices can flourish."
It was previously reported that the number of corruption cases investigated by the Corrupt Practices Investigation Bureau (CPIB) fell to a new low last year. Prime Minister Lee Hsien Loong attributed Singapore's largely corruption-free system to strong political leadership, a robust anti-corruption framework and a culture that eschews corruption.