‘Recently, EY hosted a session in New Delhi on “Mechanisms for tackling corruption” where we had a thought provoking debate on the state of fraud, bribery and corruption in India. Mr. P.C. Sharma, former Director with the CBI and former member at the National Human Rights Commission led the session, engaging in a stimulating discussion on these issues which currently plague the private and public sectors alike.
“Corruption, as we understood a decade and a half ago as bribery, has now acquired a monstrous profile”, he said addressing the delegates present. No surprises there – the ground reality is that challenges related to bribery, corruption, fraud risks etc. have snowballed into almost a ‘larger than life’ avatar. The repercussions of unethical activities are enormous. Frauds, scams, financial irregularities, money laundering, tax evasion, kickbacks etc. are not restricted to one sector, industry or geography. Fraudsters can be from varying backgrounds, from being highly educated tech experts hacking electronic devices to white collar workers possibly engaging in procurement fraud.
Today, we see the Government and regulators being cognizant of these realities and are increasingly trying to drive compliance through new laws and provisions such as the Lokpal Act, Information Technology Act etc. It seems to be a unanimous opinion that the Lokpal Act is expected to be a gamechanger as its impact would be both on the government as well as private sector. While the Act has been passed, it is yet to become truly functional. It is a wait and watch game for the nation, seeing it as a beacon of hope in these somewhat grey times.
Corruption is pervasive – it thrives in developed and developing markets alike. It affects financial institutions in the former, while the latter grapples with sluggish development and growth. And while the scenario is still quite grave, frauds and scams are perceived to be one of the most complex dimensions of corruption in India.
An interesting aspect pointed out by Mr. Sharma was how all sectors should strive to develop a high level of morality and ethics. “Corporate governance has to take note of functioning and conforming to ethical norms”, he said. “These ethical norms are to be devised by you all – no one else can enforce it.”
Soon after, Mr. Richard Dean from Baker McKenzie moderated a few questions from the audience around the practical challenges faced and the appropriate steps to handle such situations.
It is remarkable to note that forums like these bring together many corporate executives across industries, all facing similar dilemmas when it comes to managing risks around fraud and corruption. With changing times, as Mr. Sharma said, that though inescapable, corruption can surely be mitigated by taking the right steps, approach and mind-set.