Chinese firms have high compliance risks:Ernst & Young

Bribery and corruption remain widespread in many countries around the world and Chinese enterprises' compliance risks are still high amid growing competition and slower economic growth, a new report published by global consultancy firm Ernst & Young said.

The report, released on Wednesday, said that 40 percent of the executives polled for the survey consider bribery and corruption widespread in 59 countries. The survey polled 2,719 executives globally in in-depth interviews including 50 from the Chinese mainland and 50 from the Hong Kong Special Administrative Region between November 2013 and February 2014, covering a wide range of industries, according to the report.

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In China, the report said, executives show more willingness to act in a manner that often leads them in the wrong direction. About 46 percent of the Chinese respondents said they are willing to pay money to win/retain business, compared with the global average of 13 percent.

About 76 percent of the Chinese respondents said they have an anti-bribery or anti-corruption policy and code of conduct in place, which is lower than the global average of 82 percent.

In most of the other aspects Chinese C-suites, or a corporation's most important senior executives, are doing much better than their global peers, including mechanisms for internal checks and reports.

While only 51 percent of the C-suites surveyed globally said they have internal reporting channels, 70 percent of China's C-suites indicated that they have such mechanism in place for reporting unethical behavior like corruption, bribery and fraud.

Top brass in Chinese companies are more aware and committed about the anti-bribery and anti-corruption policies, the survey said. In China, 86 percent of the executives said they are aware of the policies, while the global average is 83 percent.

"C-suites in China are also more aware of the fact that strengthened investigations and penalties over corruption and bribery alike may impact not only enterprises but also individuals, especially senior managers. Ethical growth is significant for both enterprises and individuals," said Dinan Shin, managing director of Ernst & Young's Fraud Investigation & Dispute Services in China.