1、Global Integrity Report 2024|1How can trust survive without integrity?Why taking the human-centered approach empowers an ethical culture2|Global Integrity Report 2024ContentsForeword Key findingsIntroduction 1.Is the value of integrity at risk?2.What is the root cause of misconduct?3.Which approach

2、to integrity are you taking?MethodologyAdditional insights:Integrity-first AI today builds trust for tomorrowAdditional insights:ESG integrity reaches a crossroad between aspiration and regulation34622|Global Integrity Report 2024Global Integrity Report|3Against a backdrop of rapid change

3、,persistent macroeconomic and geopolitical uncertainty,as well as increased regulatory scrutiny,organizations are finding it increasingly difficult to maintain a culture of integrity and compliance.While third parties continue to be involved in a significant number of integrity incidents,the EY Glob

4、al Integrity Report 2024 suggests that there are internal forces at play as well.In an unfortunate turn,since the EY Global Integrity Report 2022,nearly four out of 10 respondents say theyd be willing to behave unethically in one or more ways to improve their career or financial position more than o

5、ne and a half times higher than our previous findings.This sentiment among our respondents serves as a reminder that an appropriate tone at the top is critical.The“say-do”gap highlighted in 2022 the difference between what leaders say and how they act has grown wider.At the top of the organization,o

6、ver two-thirds of board members say theyd be willing to behave unethically in one or more ways for their own benefit,up from 43%two years ago.More than eroding trust within and outside the organization,a top-down,“all talk,no walk”mentality puts the organizations reputation and bottom line at risk.T

7、he good news is that almost half(49%)of global respondents think compliance with their organizations standards of integrity has improved in the last two years,up 7%from 2022.Its a trend that needs to continue as the integrity risk landscape only increases in complexity.The more challenging the times

8、,the more important operating with integrity becomes.In todays environment,acting with integrity is vital for building trust among employees,customers,suppliers and investors.It starts with people.Organizations will want to take steps to build an integrity-first organization that puts people at the

9、center of their policies,training and culture.At the same time,leaders will need to step up.They should set the tone for a culture that doesnt tolerate misconduct by behaving with integrity themselves and by acting against misconduct when they see it.They also need to create an environment where emp

10、loyees can speak up without retribution.The EY Global Integrity Report 2024 reinforces the need for organizations to refocus on integrity,and provides practical and actionable insights that compliance leaders can use to promote a culture of compliance within their organizations.ForewordAndrew Gordon

11、 Global LeaderEY Forensic&Integrity ServicesGlobal Integrity Report 2024|34|Global Integrity Report 2024Willingness to act without integrity appears to be on the rise.Leaders need to act on what they say.Nearly four out of 10(38%)global respondents admit theyd be prepared to behave unethically in on

12、e or more ways to improve their own career progression or remuneration more than one and a half times higher than the findings in our last report.Employee misconduct is directly influenced by the behaviors they observe from leaders.If leaders arent prepared to act with integrity,neither will employe

13、es.For example,where 25%of workers say theyd behave unethically for their own benefit,the percentage rises to 67%among board members and 51%among senior management.Leaders who talk about integrity but dont reflect it in their own behaviors are the highest offenders of integrity within an organizatio

14、n.Key findingsThe EY Global Integrity Report 2024 highlights a positive development,with almost half(49%)of global respondents thinking that compliance with their organizations standards of integrity has improved in the last two years.This marks an increase of seven percentage points from our EY Glo

15、bal Integrity Report 2022 findings.But headwinds continue when it comes to the true test of integrity:the everyday actions of people.Perceived tolerance of unethical behavior is holding steadyBase:2020/2022/2024 Global(2,948/4,612/5,464).33%2020202220244|Global Integrity Report 2024%agree that uneth

16、ical behavior is tolerated when senior staff or high performers are involved35%31%Global Integrity Report|5More than half(54%)of global respondents say that employees not understanding policies or requirements,combined with a lack of internal resources to manage compliance activities,creates opportu

17、nities for employees to violate integrity standards.In response,52%agree that awareness,training and communications,as well as governance and leadership,are top priorities for their integrity programs over the next two years.Communication and awareness are critical to the success of compliance progr

18、ams.Nearly two-thirds of board members(65%)and 57%of senior management feel under pressure not to report misconduct(versus 50%of employees).Further,in the last two years,43%of board members have had concerns about misconduct within their organization that they chose not to report(versus 19%of employ

19、ees).Four in 10 board members also admit that when an issue is reported,theyve faced retaliation themselves or witnessed adverse consequences toward someone who reported misconduct(versus 16%of employees).Leaders themselves felt pressure not to report observed misconduct within their organization.52

20、%of global respondents agree that awareness,training and communications,as well as governance and leadership,are top priorities for their integrity programs over the next two years.Note:This survey is designed to be as global as possible,within practical constraints.We have conducted a broad survey

21、of geographies,sizes of organization and employee levels.As such,the survey results identify responses from a broad data set and may not be indicative of the readers domicile but reflect trends identified by respondents in a more diverse set of circumstances.This survey includes the views of individ

22、uals who have self-identified as a board director.EY professionals do not define“a board”within the context of this survey;references to board directors could,therefore,include a variety of board types across the range of organizations where survey respondents work.Global Integrity Report 2024|56|Gl

23、obal Integrity ReportIntroductionGlobal Integrity Report 2024|7The content in this report helps organizations,executives and leaders entrusted with steering the moral compass of the company during these uncertain times to learn more about how businesses across the globe are approaching integrity ami

24、d significant operational challenges and regulatory complexity.It includes our insights and key takeaways to address the evolution of the compliance environment and the establishment of organizational integrity.The findings of the EY Global Integrity Report 2024 suggest that chief compliance officer

25、s(CCOs)and in-house general counsel,in particular,are seeing their roles and responsibilities expand.This is adding pressure to an increasingly long list of requirements and skills they need to keep current within a rapidly changing environment.One in five organizations has had a significant integri

26、ty incident in the last two years.One in five respondents admits that their organization has had a significant integrity incident,such as a major fraud,data privacy and security breach,or regulatory compliance violation in the last two years.Among board directors,this percentage rises to one-third.N

27、otably,of those who say their organization had a significant integrity incident,more than two-thirds(68%)say the incident involved a third party.Based on an analysis of over 500,000 corporate violations in the US and UK from 2010 to 2023,1 we identified the following key highlights:Almost US$1 trill

28、ion in penalties have been incurred since 2010(inflation adjusted),with over 40%growth in both the number of violations and the number of companies in violation.Certain financial and employment violations have become two to 10 times more frequent since 2010,including accounting deficiencies,AML defi

29、ciencies,tax violations,labor standards,workplace safety and consumer privacy.On the flipside,there has been a sharp drop inviolations related to employee compensation,public safety,banking and the environment,and limited progress on anti-competitive behavior,discrimination or whistleblower retaliat

30、ion.Violations typically associated with“a few bad apples”account for less than 10%of penalties(e.g.,fraud,bribery)the most salient violations may require an erosion of integrity culture to happen(e.g.,environment,price-fixing,consumer protection).Repeat offending is linked to an erosion of culture.

31、In instances where companies were repeat offenders,systematic issues within their compliance program or organization may not have been addressed.The number of different violation types steadily climbs from one in four companies with a violation in a single year up to 8.3 for those with a violation e

32、very year since 2010.IntroductionCorporate integrity and trust are the foundations upon which business excellence sits.When we refer to integrity,we refer to the creation of a culture that supports ethical decision-making,and protecting organizations against the temptations to pursue short-term gain

33、s at the expense of ethical behavior.In an environment of persistent macroeconomic,geopolitical and market volatility,and regulatory scrutiny,todays executives find themselves navigating a business landscape of increased complexity and uncertainty that may be putting corporate integrity to the test.

34、1 Analysis of corporate civil and criminal penalties included in the Violation Tracker(https:/violationtracker.goodjobsfirst.org/)and Violation Tracker UK(https:/violationtrackeruk.goodjobsfirst.org/)databases,both produced by the Corporate Research Project of Good Jobs First.All penalty amounts wer

35、e converted to US$and inflation adjusted to 2023 dollars.This analysis excludes fines of less than US$5,000(nominal)in the US and includes“cautions”with no dollar amount issued by UK regulators.Integrity is an essential component of trust.Without trust,from employees,customers,suppliers and investor

36、s,the future viability of the organization can come under threat.By acknowledging the seriousness of misconduct and taking proactive steps to prevent,detect and address it,companies can build an integrity-first organization that puts people at the center and establishes a robust culture that is supp

37、orted by unwavering commitment from leadership and on-demand support for employees.However,for any integrity and compliance program to succeed,companies must start(but not end)with board members and executives,who must set the tone for a culture that doesnt tolerate misconduct.Leaders need to listen

38、,practice what they preach and act against misconduct.Sadly,there will always be some“potentially compromised employees.”But,by creating an integrity-first culture that not only encourages but also incentivizes employees to act with integrity,even when no one is looking,organizations can create an e

39、nvironment that truly reflect its belief system and doing the right thing,even in times of adversity and uncertainty.21%of global respondents say their organization has experienced a significant integrity incident in the last two years.8|Global Integrity Report 2024The gap between talk and action re

40、mains wide The say-do gap is an issue we raised in the EY Global Integrity Report 2022.The latest findings suggest little has changed to close the gap between what leaders are saying about corporate integrity and what they are doing or what their people are doing.This is especially concerning at the

41、 board level,where executives appear more likely to behave badly themselves and tolerate the behavior of potentially compromised employees if they are senior or high performers.More than eroding(or erasing)trust within and outside the organization,a top-down,all talk,no walk mentality puts the organ

42、izations reputation and bottom line at risk.One recent research finding suggests that corporate fraud destroys roughly 1.6%of a companys equity value annually,equal to US$830b in 2021.2 Leaders across the organization need to act with integrity.They should be subject to at least the same responsibil

43、ities and disciplinary actions for wrongdoing that apply to everyone else in the business.Organizations can create a virtuous circle of integrity In times of rapid change and difficult market conditions,it can be challenging for organizations to maintain or strengthen their standards of integrity.Ar

44、guably,this is exactly the time to make integrity a top priority.By taking an agile,human-centered approach to integrity one that puts the right programs in place to drive behavior to create a strong culture and a strong belief in their commitment to integrity organizations can keep pace with evolvi

45、ng regulations and increasing societal expectations.Equally,they can create a virtuous circle of integrity that sets a course to renewed trust within the organization,and among customers,investors,governments and societies.2 Dyck,Alexander,Morse,Adair,Zingales,Luigi,How pervasive is corporate fraud?

46、,George J.Stigler Center for the Study of the Economy and the State,New Working Paper Series No.#327,January 2023.https:/ 20 March 2024.In the last two years,how often have you heard management communicate about the importance of behaving with integrity?Introduction47%29%56%23%53%30%47%30%33%29%Neve

47、r Rarely Occasionally Frequently13%8%10%8%10%5%13%8%19%13%Note:The chart excludes%of respondents who answered”dont know”and”prefer not to say”so does not add up to 100%.Board director or memberSenior managementOther managementOther employeeGlobal“In business,trust and integrity are the pillars that

48、uphold an organizations reputation and build confidence.Ignoring ethical values isnt just a lapse in judgmentits a gamble with an organizations most valuable asset.Andrew Gordon,Global Leader EY Forensic&Integrity ServicesGlobal Integrity Report|9IntroductionCorporate integrity is about choosing eth

49、ical courage over convenient shortcuts,prioritizing what is right over what is profitable,and embodying the companys core values in every action,not just in rhetoric.Arpinder Singh,Global Markets and India Leader EY Forensic&Integrity Services“Global Integrity Report 2024|910|Global Integrity Report

50、1Is the value of integrity at risk?Global Integrity Report 2024|11Is the value of integrity at risk?The current state of integrityAlmost half of respondents report improved standards of integrity.Forty-nine percent of all global respondents think compliance within their organizations standards of in

51、tegrity has improved in the last two years,marking an increase of seven percentage points from the EY Global Integrity Report 2022 findings.In emerging markets,58%of respondents believe compliance has improved,which is a positive development given the inherent integrity and compliance risks in such

52、markets.Top reasons cited for improved integrity suggest that improvements are coming both from better direction from management and leadership,and stricter regulation and pressure from regulators.Despite the rise in overall perception of integrity,companies struggle with significant incidents and v

53、iolations.Twenty percent of companies admit that their organization has had a significant integrity incident,such as a major fraud,data privacy or security breach,or regulatory compliance violation in the last two years.Notably,of those who say their organization had a significant integrity incident

54、,more than two-thirds report the incident involved a third party.2024They have gotten betterThey have stayed the sameThey have gotten worseIn general,has compliance with your organizations standards of integrity gotten better or worse in the last two years,or stayed the same?GlobalDevelopedEmerging4

55、9%42%6%39507%39%50%58%36%5%Note:The chart excludes%of respondents who answered”dont know”and/or”prefer not to say”so does not add up to 100%.Even in the most ethical organizations,misconduct can and will occur.Such misconduct in the form of major corporate violations is costly,both in terms of inter

56、nal resourcing to investigate and remediate misconduct,and settling violations and fines with government regulators.Organizations should be periodically evaluating the nature of their incidents and determining the largest issues,drivers and lessons learned.This exercise goes hand in hand with ongoin

57、g risk assessment activities and can help identify systemic operational issues requiring more broad remediation across the organization.It can also pinpoint targeted improvements within discrete compliance areas.For example,according to the research,compliance personnel most often cited employees no

58、t understanding policy requirements and misunderstandings due to cultural differences as the top issues causing historic incidents and violations.Organizations can develop targeted education campaigns and on-demand communication channels for higher-risk employees,jurisdictions and compliance risk ar

59、eas.This can be more effective than classroom or web-based training modules.EY key takeaways49%of all global respondents think compliance within their organizations standards of integrity has improved in the last two years.12|Global Integrity Report 2024Is the value of integrity at risk?3 Corruption

60、 Perceptions Index 2023,Transparency International,2023,https:/images.transparencycdn.org/images/CPI-2023-Report.pdf.4 Moushey,Leah,Tillen,James G.,Hollinger,Abi,“Anti-Bribery&Corruption:Global overview,”Miller&Chevalier Chartered,2 February 2024,https:/ on 20 March 2024.5 Ibid.Headwinds on sustaini

61、ng integrity In todays environment,what factors are having the greatest influence on a companys ability to act with integrity?The research points to a number of key external and internal challenges.53%of global respondents say that employee turnover and employees not understanding policy are the gre

62、atest internal threats to organizational standards of integrity.External risks Nearly half(49%)of respondents are finding it difficult to adapt to the speed and volume of change in regulations,and say economic pressures,such as inflation,unemployment and exchange rates,make it harder to carry out bu

63、siness with integrity.Geographically,from a list of twelve regions,global legal and compliance respondents cite China(22%),Eastern Europe,including Russia(21%),US and Canada(17%)and Middle East and North Africa(16%)as posing the greatest integrity risks,including compliance and fraud risks,for doing

64、 business in the next two years.Employee risks Continuing challenges around misconduct are making it difficult for organizations to drive higher standards of integrity across the business and among third parties and supply chains.More than one-third(38%)of global respondents say theyd be willing to

65、behave unethically if asked by a manager.Nearly half(47%)of respondents say employees pose the greatest integrity risk for the organization over the next two years.Operational risks While 40%cite privacy and security as their greatest operational integrity risks,53%of global respondents say that emp

66、loyee turnover and employees not understanding policy are the greatest internal threats to organizational standards of integrity.47%of global respondents say people within the organization pose the greatest integrity risk for the organization over the next two years.49%of global respondents say the

67、current macroenvironment is the greatest source of external pressure on employees to violate organizational standards of integrity.When conducting risk assessments,its important for companies to consider the impact of both internal and external factors on business strategies,commercial activities an

68、d employee pressures.Its also important to understand not only which factors apply but also how and why they apply to link to compliance risks and better inform compliance priorities.For example,if employee turnover is seen as one of the biggest internal factors because it weakens the companys abili

69、ty to spot and prevent wrongdoing,this insight provides opportunities not only focused on employee retention and improved onboarding but also on automating preventive controls and monitoring them for effectiveness.According to Transparency Internationals 2023 Corruption Perceptions Index,corruption

70、continues to thrive around the world.Global Integrity Report 2024|13r72%67%55%31%Disincentivized bad actionsEmployee discipline measuresInternal investigations and remediation processesEmployee compensation structures that reduce or recoup compensation for failure to comply with ethical standards Ex

71、ecutive compensation and bonus clawback in cases of compliance breaches Implemented new trainingTraining on ethics and integrity in business or professional lifeProcesses or training for conducting due diligence on customersProcesses or training for conducting due diligence on third parties,such as

72、suppliers,vendors,partners,customers or consultantsEnacted new policiesTraining on ethics and integrity in business or professional lifeA policy on either corporate social responsibility(CSR)or environmental,social and governance(ESG)policies concerning appropriate communication channels and corpora

73、te access to data on personal mobile devices and messaging platforms,e.g.,WhatsApp Incentivized good behaviorIncentives to encourage behaviors that demonstrate integrity Percentage of organizations that have taken the following actions:Organizations have adopted a number of policies and programs to

74、enhance integrity.Is the value of integrity at risk?14|Global Integrity Report2What is the root cause of misconduct?Global Integrity Report 2024|15To better understand what breeds misconduct and how it can thrive,EY conducted a deeper analysis of the report data.The results suggest that most organiz

75、ations can divide their employees into one of three types based on their willingness to exhibit illegal or unethical behavior.1.Principled employees are unwilling to act unethically for personal gain or at the request of a manager.2.Potentially compromised employees are willing to act unethically fo

76、r personal gain or at the request of a manager.3.Potential enablers are willing to act unethically at the request of a manager but would not do so for personal gain.More than half(58%)of employees take a principled approach to integrity,indicating a majority of employees are already inclined to upho

77、ld a culture of integrity.However,this leaves a significant remainder of employees within the organization(42%)who are willing to sacrifice integrity under the right conditions.Employees must therefore be properly incentivized and supported when they have the courage to come forward and report wrong

78、doing,so that misconduct can be appropriately addressed and corrected.The research shows that potentially compromised employees have a more negative view of their organizations compliance environment.They are less likely to say their organizations have programs,policies and controls in place to enco

79、urage integrity.Theyre more likely to believe unethical behavior is often tolerated at their organization.Further,they are nearly three times more likely to say that unethical conduct is ignored within their teams,and more than five times more likely to say that unethical conduct is ignored within t

80、heir organizations supply or distribution chain.What is the root cause of misconduct?What is the root cause of misconduct?Employee approaches toward integrity and unethical or illegal activities Based on employees willingness and motivations to commit illegal or unethical acts Employees who say thei

81、r companies have the following programs,policies and controls in place to encourage integrity%of employees58%More than half(58%)of employees take a principled approach,which bodes well for the future of corporate integrity.Principled employeesPotentially compromised employeesPotential enablersUnwill

82、ing to act unethically for personal gain or at the request of a managerWilling to act unethically for personal gain or at the request of a managerWilling to act unethically at the request of a manager but would not do so for personal gainTraining on ethics and integrity Incentives to encourage ethic

83、al behaviorRobust controls to ensure rules are not easy to bypassDefined processes to manage misconductDisciplinary measures to address illegal or unethical behavior58%38%4%33%49%30%32%41%61%27%46%31%49%Potentially compromised employeesPrincipled employees Employees approach to integrity%of employee

84、sDescription of employeesapproach to integrity16|Global Integrity Report 202438%15%13%35%38%66%19%45%What is the root cause of misconduct?Interestingly,potentially compromised employees are more likely to work for organizations that experienced major integrity events in the past two years,causing mo

85、re potential reputational harm and incurring more regulatory action.Potentially compromised employees are more likely to have had bad experiences when reporting misconduct.They were twice as likely as principled employees to have been pressured not to report misconduct,nearly three times more likely

86、 to have faced retaliation for reporting misconduct,and two and a half times more likely to have felt misconduct wasnt properly dealt with.For potentially compromised employees,breaking with integrity guidelines may be less a question of being hardwired to behave badly and more a question of learned

87、 or rationalized behavior.They may have the attitude that“if others are doing it,I can get away with it too.”Or“if the company doesnt care,I would be open to behaving badly if needed or pressured into it.”Fundamentally,it seems that potentially compromised employees can rationalize their behavior be

88、cause they dont trust the integrity of the organization.Similarly a significant proportion of leaders admit a willingness to behave unethically.Two-thirds(67%)of board members admit theyd be prepared to behave unethically in one or more ways to improve their own career progression or remuneration pa

89、ckage(versus only 25%of employees).Potentially compromised employees are more likely to work for organizations that experienced major integrity events in the past two years%of employees who have seen the following at their company over the past two yearsEmployees who have personally reported miscond

90、uct to management or through the organizations whistleblowing hotlinePotentially compromised employees are more likely to have had bad experiences when reporting misconduct.of potentially compromised employeesof principled employeesPotential reputational harm Employee saw behavior that would damage

91、organizations reputation and no action was takenReputational damage Organizations integrity matters have been discussed externally by the public or the pressRegulatory action Regulators have taken action against the organization for breaching integrity standardsPrincipled employees Potentially compr

92、omised employees%of employees who personally reported misconduct%of reporters who were pressured to not report misconduct%of reporters who faced retaliation due to reporting misconduct%of reporters who dont feel misconduct was dealt withWhat experience did employees who reported misconduct have?24%4

93、5%30%47%26%45%Global Integrity Report 2024|17 Does misconduct stem from mistrust?Global Integrity Report|17On any of the occasions you reported misconduct,did you feel under pressure not to report?Further,of those who acknowledge that their organization experienced an integrity incident,45%attribute

94、 the root cause to a lack of appropriate tone from senior leadership or pressure from management.Tone at the top issues are also reflected in leaderships willingness to address reported misconduct.While more than half(52%)of board members say theyve reported misconduct in the last two years(down fro

95、m 59%in 2022),nearly two-thirds(65%)of those who reported felt under pressure not to report(versus 62%in 2022).Equally significant,of the board members who chose not to report,38%felt that their concerns wouldnt be acted upon(versus 46%of employees),35%feared for their personal safety(versus 28%of e

96、mployees)and 32%felt under pressure from management not to report(versus 25%of employees).GlobalWhich of the following was the root cause that led to the integrity incident taking place?Have you personally ever reported issues of misconduct for example,to management or through a whistleblowing hotli

97、ne in the last two years?Base:global(1132).Base:Global(5464);board director or member(445);senior management(1625);other management(2134);other employee(1260).Note:The chart excludes%of respondents who answered“prefer not to say”so does not add up to 100%.Base:Global(1603);board director or member(2

98、32);senior management(626);other management(530);other employee(215).Note:The chart excludes%of respondents who answered”prefer not to say”so does not add up to 100%.Failure of financial processes and controlsLack of internal resources to manage compliance and integrity activitiesEmployees not under

99、standing policy and requirements Lack of appropriate tone from senior leadershipChanging or competing regulatory requirements in different jurisdictions Misunderstanding due to cross-cultural differences or standards Involvement of external criminals/criminal organizations Employee turnoverPressure

100、by management29%68%No YesNo Yes52%46%39%59%25%73%17%80%54%45%65%34%57%42%47%51%50%49%27%27%26%25%23%22%21%20%20%What is the root cause of misconduct?“The obligation of the ethics and compliance function is to investigate with equal zealous and enthusiasm the complaints of employees irrespective of t

101、heir rank in the organization.Once the investigation is completed,it is imperative the business follows through on the necessary findings.Marcel Cordero,Legal&Compliance Director,Alicorp Global Integrity Report 2024|17Board director or memberSenior managementOther managementOther employeeGlobalBoard

102、 director or memberSenior managementOther managementOther employeeGlobal18|Global Integrity Report 2024Nearly half of board members(47%)and 40%of senior management also admit that,in the last two years,theyve seen behavior by other employees that would damage their organizations reputation if it was

103、 known externally and that no internal response was taken.Why should employees speak up if leaders dont act?Organizations need to create an environment where employees feel psychologically safe to speak up and confident that their concerns will not only be heard,but also acted upon.Whistleblowing,or

104、 a“speak up”culture,is a powerful tool that empowers individuals to speak up against misconduct and unethical behavior,and serves as a crucial safeguard against corruption,fraud and other forms of wrongdoing.According to the Association of Certified Fraud Examiners(AFCE),43%of all fraud is uncovered

105、 through tips by whistleblowers(of those,more than half were employees).In 2023,the US(S.811 SEC Whistleblower Reform Act of 2023)and the EU(EU Whistleblowing Directive 2023)introduced new whistleblowing legislation to extend protections and make access to whistleblowing mechanisms mandatory for mor

106、e companies.More whistleblower protection laws,increased awareness of the importance of reporting misconduct,and advancements in communication technology have created more efficient and effective channels to report wrongdoing.The findings suggest more organizations have implemented whistleblowing ho

107、tlines.The proportion of respondents saying their organization does not have one is significantly lower than two years ago(down from 14%to 7%).Moreover,one-third say it has become easier to report concerns,and that the solutions for whistleblowing are more advanced and offer greater anonymity.These

108、advancements may,at least in part,explain why board members and senior management say they feel more confident that the whistleblowing environment has improved over the last two years.Employees,however,are less convinced,reflecting distrust in the whistleblowing process.Which,if any,of the following

109、 were reasons why you did not report your concerns?What is the root cause of misconduct?6 Association of Certified Fraud Examiners,Occupational Fraud 2024:A Report to the Nations,2024 Association of Certified Fraud Examiners,Inc.,https:/ director or member(191);senior management(517);other managemen

110、t(475);other employee(242).Felt like my concerns would not be acted uponConcern about my future career progressionFear for my personal safetyFelt under pressure from management not to reportFelt it was not my responsibility to address itLoyalty to my colleaguesLoyalty to my organizationDid not know

111、who to talk to38%35%30%27%26%25%22%20%Organizations need to create an environment where employees feel psychologically safe to speak up and confident that their concerns will not only be heard,but also acted upon.38%30%35%32%27%26%30%23%34%36%31%27%28%24%27%20%39%34%28%25%22%27%19%20%46%37%28%25%26%

112、24%13%20%GlobalBoard director or memberSenior managementOther managementOther employeeGlobal Integrity Report 2024|19A significant number within leadership (41%of board members and 28%of senior management)admit theyve faced or witnessed retaliation against someone who reported misconduct through the

113、 organizations whistleblowing mechanism.Senior leaders are also more likely than employees to acknowledge that their reason for not reporting their concerns was fear for their personal safety.This suggests that the measures companies have taken to create a speak-up culture have been more effective a

114、t the employee level but require stronger efforts at the senior leadership level.The survey points to protection from retaliation as a key area among both senior leadership as well as employees.Without a supportive environment to speak up when they see wrongdoing,employees may feel better incentiviz

115、ed to report their grievances externally.For example,the Department of Justices new Whistleblower Pilot Program in the US,announced in early 2024,aims to incentivize whistleblowers to come forward with information related to corporate misconduct.This program,in addition to other whistleblower progra

116、ms in the US and globally,may add pressure to an organizations efforts to encourage employees to report misconduct through internal channels.Its vital that organizations design and implement internal whistleblower systems that are trusted by employees and used by all levels across the organization w

117、ithout fear of retribution.Its become easier for employees to report their concernsWhistleblowers are now offered more protection from retaliationBoard membersSenior managementEmployees20242024What is the root cause of misconduct?41%36%35%25%14%13%EY key takeaway202220222024202246%44%26%40%37%33%In

118、striving to establish trust in responses to reported misconduct,organizations need to do more to hold leadership accountable and incentivize speak-up behavior by:Requiring periodic certifications by senior leadership,including board members and executives,acknowledging that they are required to repo

119、rt wrongdoing and affirming that they have reported all observed wrongdoing Developing specific privacy protocols and controls to offer greater confidentiality protections,and strictly adhering to such confidentiality standards throughout the report-handling process Ensuring those charged with inves

120、tigating and resolving reports of misconduct are truly independent;in cases involving senior leadership,this may require formation of a special committee Following up with whistleblowers to periodically inform them of status and resolution of reported complaints Subjecting the whistleblower hotline

121、to periodic audits by independent parties;such audits should include evaluation of completeness and adequacy in addressing all reported incidents,compliance with confidentiality requirements,consistency of disciplinary actions,and effectiveness of whistleblowing hotline controls(consider publishing

122、summary findings from this audit within the organization to instill employee confidence in the reporting process)20|Global Integrity Report3Which approach to integrity are you taking?Global Integrity Report 2024|211.Integrity-first.In an integrity-first organization,management speaks frequently abou

123、t the importance of integrity and puts policies and programs in place to back their words up with actions,thus closing the“say-do”gap.Only 22%of organizations fall into this category,down from 32%in our last report.2.Policy-driven.For 23%of organizations(versus 17%in our last report),management has

124、taken a policy-driven approach,selecting a range of policies and programs to boost integrity and meet compliance obligations without fully embracing an integrity-first mindset.3.Say-do gap.Executives speak frequently about integrity in organizations that fall into this category.However,they dont bac

125、k up their words with actions by implementing policies and programs.Slightly less than half(49%)of organizations take this approach to integrity roughly the same(47%)as our last report.4.Not a priority.Interestingly,5%of organizations dont prioritize the promotion of integrity at all a statistic tha

126、t has remained largely static since our last report.While nearly a third of organizations were taking an integrity-first approach two years ago,this has dropped to fewer than a quarter based on this years findings.Given the increase in organizations that are taking a policy-driven approach,its possi

127、ble that organizations that were previously taking an integrity-first approach believe that,now they have the appropriate policies in place,they no longer need to communicate the importance of integrity as frequently,nor do they see the need to be as vigilant about activating policies as they did be

128、fore.These organizations appear to have moved from being on the front foot regarding integrity to allowing it to take a back seat while they focus on navigating their business through more volatile economic terrain.Yet its in difficult times that an integrity-first approach is most critical.Its a th

129、reshold to which every organization should aspire in good and bad times.Which approach to integrity are you taking?Based on the report data and deeper analysis around organizational policies and programs,and how often management speaks about the importance of integrity,weve learned that,generally,co

130、mpanies take one of four distinct approaches to their integrity culture:CategoryPolicy-drivenSay-do gapNot a priority20242022Integrity-firstIn an integrity-first organization,management speaks frequently about the importance of integrity,and puts policies and programs in place to back their words up

131、 with actions.49%5%32%23%17%47%4%22%22|Global Integrity ReportEthics may start at the top,but managers steer the moral compass of the company.Training people leaders to appropriately act on conveyed misconduct is essential to encouraging a speak-up culture.Erica Salmon Byrne,Chief Strategy Officer a

132、nd Executive Chair,Ethisphere and the Business Ethics Leadership Alliance.“22|Global Integrity Report 2024Global Integrity Report 2024|23Which approach to integrity culture are you taking?How would you categorize your organization(integrity-first,policy-driven,say-do gap or not a priority)?Where do

133、you want to be two years from now?Do you see potentially compromised employees in your organization?If so,where?What can you do to stimulate improvement using the mechanisms you have?What new mechanisms do you need to put in place to become or remain an integrity-first organization?Questions for org

134、anizations to ask themselves Four ways to build a people-centered,integrity-first organization If the goal is to become an integrity-first organization,the next question leaders may ask is:How do I do that?It starts by putting people at the center of the integrity agenda.People are an organizations

135、most valued asset and greatest liability when it comes to integrity.As such,they need to be at the heart of the organizations approach to integrity.This includes implementing supportive frameworks and structures,as well as creating an integrity-first culture that drives positive behaviors and a stro

136、ng commitment to integrity.Here are four ways leaders can build a people-centered integrity-first organization:1.Lead from the top The report data demonstrates that integrity cant be built or sustained on an approach of all talk and no action.Organizations need to focus on preventing and addressing

137、misconduct by starting at the top.Leaders need to do more than promote ethical behavior they need to demonstrate it.Additionally,leaders need to adhere to the integrity-related policies and procedures they establish.They need to not only establish mechanisms for reporting and investigating incidents

138、 of misconduct but also support and follow them.If organizations want to close the say-do gap,leaders will need to act with integrity as much as they espouse integrity for those lower down in the organization.Leaders need to do more than promote ethical behavior they need to demonstrate it.73%26%1%4

139、9%45%5%Companies with a more robust approach to integrity have fewer employees willing to sacrifice the organizations integrity values Employee approaches toward integrity and unethical or illegal activities Based on employees willingness and motivations to commit illegal or unethical actsSource:EY

140、Global Integrity Report 2024 survey data.Integrity-first organizationsOther organizations Principled employees Potentially compromised employees Potential enablers24|Global Integrity Report 2024Which approach to integrity culture are you taking?This can be a significant step in creating the supporti

141、ve environment that employees need to feel comfortable to not only behave with integrity but also intervene or report when they see wrongdoing.Leaders would do well to foster an environment that focuses on trust,psychological safety and transparent communication that is heard at all levels of the or

142、ganization.This can start with leaders listening and acting.The more employees see leaders upholding the organizations values and taking concrete action in response to misconduct,the more likely they are to report wrongdoing when they observe it.2.Design and implement a structure to execute strategy

143、 Structure follows strategy.A strategy without structure can limit the effectiveness of an organizations integrity program.Organizations need to establish sound governance structures that align with the organizations defined roles and responsibilities;establish clear accountability through both KPIs

144、 and key behavioral indicators(KBIs)break down the silos to allow the free flow of information to those who need it;and build trust through transparency.Further,they need to identify the root cause of wrongdoing,looking beyond simply assigning blame to potentially compromised employees to address sy

145、stemic issues.The analysis suggests that companies with a more robust approach to integrity are more likely to integrate compliance and reputational risk management into day-to-day decision-making processes.Employees are also more likely to believe in their organizations rules and processes,and more

146、 likely to trust their colleagues.A strategy without structure can limit the effectiveness of an organizations integrity program.86%79%61%47%87%79%59%54%Companies with a more robust approach to integrity are more likely to integrate compliance and reputational risk management into decision-making pr

147、ocessesSource:EY Global Integrity Report 2024 survey data.Compliance with regulations is always considered when making important decisions%of organizationsReputational risk is always considered when making important decisions%of organizationsIntegrity-firstSay-do gapPolicy-drivenNot a priorityIntegr

148、ity-firstSay-do gapPolicy-drivenNot a priorityGlobal Integrity Report 2024|25Which approach to integrity culture are you taking?3.Strengthen a culture of integrity across the organization Organizations need to recognize that integrity is a team effort.Compliance should not be viewed as a stand-alone

149、 support function.Compliance and integrity standards need to be embedded directly into operations and procedures.For example,specific compliance requirements should be called out in corporate policies and built into process workflows,such as new business development,third-party risk management,vendo

150、r payments and employee reimbursements.KPIs and KBIs should be incorporated into performance and remuneration across the board,with compensation structures to reward employees for demonstrating integrity rather than punishing them for misconduct or noncompliance.In our findings,half of global respon

151、dents specifically call out employee and executive compensation structures that punish noncompliance.Metrics should equally focus on positive reinforcement for behaving with integrity.4.Boost awareness,training and communication Respondents say better awareness,training and communication ranks among

152、 their top three priorities to address integrity risks over the next two years.Traditional ways of training and communicating integrity need to adapt to real-world demands.Periodic training may teach broad principles,but it is not enough to navigate the complexities faced in real-life scenarios.More

153、over,employees may meet barriers to find the guidance they need;they may feel uncomfortable contacting a manager with questions,or overwhelmed by the volume of policies and regulations to search through for answers.Just-in-time and consumer-targeted training can help.Employees receive online instruc

154、tion tailored to their job profile when they need it.Leaders may also consider a GPT-powered compliance chatbot to answer on-demand questions about specific compliance scenarios or company policies and procedures,creating a real-time helpline for inquiries.Leaders,meanwhile,need to communicate why i

155、ntegrity is important,with clear and repeated messaging.Currently,fewer than half(47%)of management teams frequently communicate to their employees the importance of behaving with integrity.Employees are more inclined to comply when they see leaderships commitment and the importance placed on integr

156、ity consistently echoed across business segments and divisions.Organizations need to recognize that traditional ways of training and communicating integrity will need to adapt to real-world demands.Global Integrity Report 2024|2526|Global Integrity ReportMethodologyGlobal Integrity Report 2024|27The

157、 EY Global Integrity Report 2024 is based on a survey of 5,464 board members,senior managers,managers and employees in a sample of large organizations and public bodies in 53 countries and territories across the Americas,Asia-Pacific and Europe,the Middle East,India and Africa.Interviews were conduc

158、ted by the global research agency,Ipsos,through online panels between October 2023 and January 2024.MethodologyUsing the survey data,EY conducted a segmentation analysis based on a comparative series of questions from the current survey and the 2022 survey.Responses were weighted to the 2024 questio

159、n“Which,if any,of the following does your organization have in place?”against the 2022 question“In the last 18 months,how often have you heard management communicate about the importance of behaving with integrity?”The responses to the second question were given a score in the latest survey so that

160、an average could be taken between the two levels of management and how often they communicated.For example,“frequent”communication was a 5,“often”was a 3,and so on.Companies that had the most policies in place and were most frequently communicated with about behaving with integrity comprise the“inte

161、grity-first”segment.Companies where management frequently communicates but is lacking in policies fall into the“say-do”gap category,and so on.North AmericaCanada 100United States 500Total 600South America and Latin AmericaArgentina 90Brazil 107Chile 70Colombia 90Ecuador 100Mexico 100Peru 45Total 602

162、Oceania Australia 100New Zealand 50Total 150Far East AsiaChina Mainland 506Hong Kong 80Indonesia 100Malaysia 100South Korea 100Taiwan 50Thailand 100Vietnam 100Total 1,136Western EuropeAustria 100Belgium 80Denmark 50Finland 100France 100Germany 100Greece 100Ireland 50Italy 100Netherlands 100Norway 60

163、Portugal 100Spain 100Sweden 100Switzerland 60United Kingdom 150Total 1,450Middle East,India and AfricaIndia 100Israel 50Kenya 45Nigeria 60Saudi Arabia 75South Africa 100Turkey 50United Arab Emirates 100Total 580Number of interviews in each regionEastern EuropeBulgaria 50Czech Republic 100Hungary 100

164、Poland 100Romania 100Serbia 100Slovakia 100Slovenia 96Ukraine 100Total 846JapanJapan 100Total 100Advanced manufacturing and mobility 1,069 20%Consumer products,retail and wholesale 954 17%Energy and resources 300 5%Financial services 794 15%Government and public sector 530 10%Health sciences and wel

165、lness 424 8%Professional firms and services 241 4%Real estate,hospitality and construction 667 12%Technology,communications and entertainment 979 18%Other 626 11%Total 6,584 120%Industry summaryBoard director or member 445 8%Senior management 1,625 30%Other management 2,134 39%Other employee 1,260 2

166、3%250499 employees 10 1%500999 employees 1,085 20%1,0004,999 employees 1,980 36%5,0009,999 employees 879 16%10,000 employees+1,180 22%Job titleEmployees Note:Respondents could choose more than one sector so the number does not add up to 100%.28|Global Integrity ReportIntegrity-first AI today builds

167、trust for tomorrowArtificial intelligence(AI)is shaping the future of many organizations and has the power to fundamentally transform the way we work.There are many significant successes around the use of AI impacting daily life,including the legal,compliance and internal audit functions.Yet for all

168、 its potential,the risks associated with AI are demonstrated in instances where it has been used to adversely influence business processes,impersonate individuals and entities,and lead to biased decision-making.According to the 2024 Edelman Trust Barometer,people trust businesses more than nongovern

169、mental organizations(NGOs)or government(59%,54%and 50%respectively)to make sure innovations are safe,understood,beneficial and accessible.Even so,59%confidence in businesses leaves considerable room for improvement.Every entity,private and public,needs to do more to build trust in the ethical use of

170、 AI.Nonetheless,AI is being rapidly adopted.The EY Global Integrity Report 2024 findings suggest organizations are grappling with AI ideation,development and deployment to transform their business.Across the organization,slightly more than a quarter(29%)say theyre currently using AI-enabled tools in

171、 their business and operations.Another quarter(25%)say they plan to do so in the next two years.Within businesses,IT is the earliest adopter,with 42%currently using AI-enabled tools.Compliance(31%)and finance(33%)are also taking bold steps.Internal audit(23%)and legal(14%),meanwhile,lag behind in ac

172、tive use of AI,but many have plans to catch up in the next two years.Given the growing expectation among regulators to move from manual corporate reporting,such as spreadsheets and email-based processes,to dynamic,real-time or near real-time monitoring and reporting,7 organizations will have to move

173、 faster than anticipated in adopting AI tools.The volume of data being generated,combined with the need for real-time information to drive business strategy and increasingly complex regulatory requirements,means that AI-enabled tools will soon become something organizations need to have now rather t

174、han something nice to have in the future.Yet organizations say theyre struggling to keep up in building governance frameworks for the ethical use of AI,even as generative AI(GenAI)picks up speed.The overall low adoption of AI within legal and internal audit suggests that the organizations second and

175、 third lines of defense are not keeping pace with the use of AI in the rest of the organization.We observed this same situation with the rise of big data and robotic process automation(RPA)in prior years,where legal,compliance and internal audit are still catching up to the organizations use of data

176、 analytics.Legal,compliance and internal audit must play a bigger role in how and where functions adopt AI.These functions should be part of the risk committee that evaluates the adoption of new innovations,such as AI,and develops guardrails around use cases.They also need to evaluate skills and com

177、petencies,and upskill executives and developers on responsible design principles and legal considerations involved in AI development.Integrity-first AI today builds trust for tomorrowArtificial intelligence(AI)is shaping the future of technology and revolutionizing industries;it has the power to con

178、tinually shift human evolution.7 Staying Compliant in a Complex World:What Todays Business Leaders Need to know,MIT SMR Connections on behalf of EY,MITSloan Management Review,2 October 2023,https:/sloanreview.mit.edu/mitsmr-connections/staying-compliant-in-a-complex-world-what-todays-business-leader

179、s-need-to-know/.Accessed on 14 April 2024.Additional insights 28|Global Integrity Report 2024Global Integrity Report 2024|29Integrity-first AI today builds trust for tomorrowKey challenges,use cases and potential for AI in the compliance function Legal and compliance executives are excited about the

180、 potential of AI and see different opportunities for many use cases.However,they are also concerned about the challenges it poses.Legal and compliance respondents in the EY Global Integrity Report 2024 cite continuous improvement,ongoing monitoring and risk assessments as the top routine compliance

181、activities best suited to the use of AI.Further,they say that AIs greatest impact in compliance is centered around advanced data gathering,manipulation and risk analysis in correlating data sets(40%),active monitoring and altering(37%),and risk-scoring activities(34%).However,legal and compliance ex

182、ecutives are wary of key risks that may be holding them back from fully deploying AI within their functions.The top two challenges they cite include inconsistent or missing data to feed into AI models,and a lack of in-house expertise.These issues mean that organizations are challenged to be sure tha

183、t AI-enabled tools are being used within the organization according to in-house guidelines and adhere to jurisdictional regulations or legal requirements.We have seen many successful uses of AI within the compliance and legal functions.For example,GenAI tools can quickly research and summarize large

184、 masses of information,draft contracts and perform certain electronic discovery procedures,greatly increasing accuracy and efficiency in executing routine tasks.AI can also help compliance leaders develop new insights,empowering better decision-marking.Specific use cases for AI within compliance and

185、 legal functions:Monitor regulatory changes and analyze internal data to identify potential compliance gaps.Streamline the due diligence process by automating third-party background checks and financial analyses to detect red flags.Improve risk assessment by analyzing financial transactions,communic

186、ations and other data to detect patterns and anomalies.Generate real-time alerts of red flag activity and triage instances of potential misconduct.Greatly reduce the cost and time to mine large data sets by using predictive models to perform email and document review in response to regulatory inquir

187、ies,subpoenas and litigation.Automatically identify and extract or redact private and privileged information across whole data sets.Provide on-demand answers to employee compliance inquiries,reference corporate policies and give“how to”instructions through AI chatbots.What are your top challenges in

188、 deploying AI within your compliance function?What are the use cases in which AI can have the greatest impact within the compliance function?Which routine compliance activities do you think are best suited to incorporate AI?Base:Global(149).My organization is comfortable with its current compliance

189、program and does not perceive a need to change Inconsistent or missing data to feed into AI models Lack of in-house expertise Lack of funding to implement Lack of executive support within my organization Do not view AI as a beneficial technology Do not know where to start No challenges present30%30%

190、29%23%18%15%9%9%Base:Global(149).Correlating disparate data sets for review Active monitoring and real-time alerting Risk scoring of potentially improper transactions,relationships,payments,etc.Ongoing prediction of outcomes based on scenarios and high-risk activities Generation of content,such as r

191、eports and memoranda Communicating with employees via chatbots Benchmarking against peer organizations Summarizing documents or data points40%37%34%25%23%22%21%21%Base:Global(149).Continuous improvement,such as ongoing review/testing of compliance activities and controls Ongoing monitoring,such as d

192、etecting potential misconductRisk assessments,such as evaluating and measuring risks across the organization Acquisition diligence,such as identifying risks and compliance gaps at targets Third-party due diligence,such as performing diligence steps and addressing red flags Training and continuing ad

193、vice,such as responding to employee inquiries Confidential reporting,such as whistleblower report intake and triage42%38%35%28%28%28%27%Global Integrity Report 2024|2930|Global Integrity Report 2024Emerging markets are ahead in managing and safeguarding the use of AI Whether organizations are in the

194、 planning stages or already actively using AI,roughly four in 10 have put measures in place to manage its deployment and use.Interestingly,emerging markets appear more mature in their understanding of,and responsibilities toward,AI.Further,51%of executives in emerging markets say theyve received tra

195、ining or guidance from their organization about the permitted uses or risks of AI,versus 35%of executives in developed markets.Rates in the Middle East,India and North Africa(60%),Far East Asia(59%)and South America(54%)are significantly higher than in Western Europe(35%),North America(32%)and Ocean

196、ia(28%).The accelerating pace of AI evolution is pushing AI regulation to the top of the agenda for policymakers In the EU,some member countries are looking to increase the use of facial recognition among their police forces.However,the European Parliament recently adopted tighter restrictions as pa

197、rt of the Artificial Intelligence Act.8 This Act,which is expected to come into force in June 2024,is the most developed AI regulation globally,and will have extraterritorial effect and steep fines,making it relevant for all organizations doing business in or with European countries.China,which was

198、one of the first countries to implement AI regulations,is currently expanding its various regulations and policies applicable to specific AI uses.China has also adopted UNESCOs recommendations on the ethics of AI and is a party to the OECDs AI principles.9 In India,the government is asking technolog

199、y companies to get express permission before publicly launching AI tools and has warned companies against using AI products that could generate responses that“threaten the integrity of the electoral process.”This represents a walk-back of its stated position in 2023 of taking a hands-off approach to

200、 AI.10 The US,meanwhile,is not likely to pass new federal legislation on AI in the near future,but regulators such as the Federal Trade Commission(FTC)have responded to public concerns about the impact of GenAI by opening expansive investigations into some AI platforms.11 There is also much US state

201、-level and locally specific legislation in force or under consideration.Integrity-first AI today builds trust for tomorrow8 Artificial Intelligence Act:MEPs adopt landmark law|News European Parliament|https:/www.europarl.europa.eu/news/en/press-room/20240308IPR19015/artificial-intelligence-act-meps-

202、adopt-landmark-law9 Global AI Law and Policy Tracker|IAPP Research and Insights|https:/iapp.org/media/pdf/resource_center/global_ai_law_policy_tracker.pdf10 India asks tech firms to seek approval before releasing unreliable AI tools|Reuters|https:/ FTC investigates open AI over data leak and ChatGPT

203、s inaccuracy|The Washington Post|https:/ measures has your organization put in place,or is planning to put in place,to manage the deployment and use of AI across the entire organization?Base:Developed(1726);Emerging(2411).36%35%34%33%35%44%42%41%43%44%45%48%46%46%46%49%Vetting AI-enabled tools and a

204、pplications prior to deployment in the organization Requiring senior leadership involvement/improvement for AI-enabled tools and applications Providing guidance to employees on the use of AI to improve business processes Setting ethical standards for appropriate use of AI Setting processes and polic

205、ies to manage the risks around AI,such as privacy or fraudAlready put in place Planning to put in placeDeveloped Emerging Developed Emerging30|Global Integrity Report 202448%43%45%43%Global Integrity Report 2024|31These latest efforts by regulators around the world suggest that AI will become more r

206、egulated as adoption increases,with additional need for organizations to manage compliance processes,protect against legal risks and employ the internal audit function to validate the effectiveness of controls around the use of AI.In the meantime,the current evolving landscape of regulations could l

207、eave organizations vulnerable to disruption if they arent proactive about instilling a culture of integrity around AI that reflects the companys values and beliefs.Five ways organizations can take an integrity-first approach to AI:1.Assess the AI strategy.Whether the organization has already impleme

208、nted AI or plans to do so in the near term,its important to understand its current maturity in managing the use of AI.An AI maturity assessment can help to identify critical gaps.For example,when a global pharmaceutical company conducted an AI compliance assessment,it learned that one of its largest

209、 gaps was the absence of a consistent AI governance framework.2.Develop a formal AI policy and the means to implement it.Governance is the anchor to enable secure,sustainable,responsible and transparent AI.While creating an AI governance framework can be useful,these are often voluntary or inconsist

210、ently applied.A more constructive approach is to develop a formal and enforceable AI policy,accompanied by the appropriate means to implement and monitor it.The policy should give specific attention to standards and guidelines addressing respect of peoples rights,safety and privacy;fairness,accuracy

211、,reliability of AI output;and the security of underlying data and models.3.Assemble a cross-functional team.For an AI policy to be most effective,multiple stakeholders across the organization(IT,privacy and information security,compliance,legal,innovation,finance and internal audit)need to work toge

212、ther to consider AI use cases,associated risks and appropriate guardrails.Each perspective is important in adopting appropriate AI strategies.4.Build a regulatory and litigation response plan for AI.With legal and regulatory environments becoming more challenging,especially pertaining to AI,organiza

213、tions should be prepared with a response plan to manage such crisis events.Should an issue arise,the organizations use of AI will be heavily scrutinized.Organizations need to know who needs to be involved,where the data lives and who is responsible for it.5.Optimize data governance and processes.In

214、the EY Global Integrity Report 2024,executives cited inconsistent or incomplete data feeds into AI models as their number one challenge in deploying AI within the compliance function.For legal and compliance professionals and arguably the workforce at large to trust the data,organizations need to ha

215、ve a clear and complete understanding of their data.This should include data mapping and lineage to know where the data comes from,as well as its level of quality and limitations.Further,organizations should have,or build,an inventory of all AI and machine learning(ML)tools in use.As the organizatio

216、ns AI capabilities mature,it can focus on building a scalable,flexible,secure infrastructure that can safely manage a portfolio of AI algorithms.Given the speed at which AI is advancing and its potential to fundamentally transform todays business landscape,organizations need to have a governance str

217、ategy for AI,and implement a systematic approach for its ethical and compliant use,sooner rather than later.An integrity-first approach that focuses on transparency,accountability,trust and fairness will promote the safe and ethical use of AI to the benefit not only of the organization but also soci

218、ety.Download the AI global regulatory landscape:https:/ Case study:How a global biopharma became a leader in ethical AI https:/ AI today builds trust for tomorrow“One of the dangers with AI is that presumption of infallibility.Another challenge is data and the use of it.Jurisdictions are understandi

219、ng and appreciating the need for ethical standards and guidance regarding the use of private data.Liban Jama,EY Americas Forensic&Integrity Services LeaderFind out moreGlobal Integrity Report 2024|3132|Global Integrity Report 2024ESG integrity reaches a crossroad between aspiration and regulation A

220、quick scan of the market landscape suggests that the tone and nature of the conversation around ESG issues have shifted since the last report.While executives continue to highlight their strides in driving ESG,the argument for ESG has moved from the aspirational corporate values,“doing the right thi

221、ng”and being good corporate citizens to the practical.Todays conversations focus on ESGs significant challenges and risks,particularly around changing regulation and data integrity.According to our survey,the top ESG challenges include keeping up with and complying with new and changing ESG regulati

222、ons(37%);limited reliable data to measure progress against performance targets(34%);and a lack of dedicated resources and budget for ESG initiatives(29%).ESG integrity reaches a crossroad between aspiration and regulation Proposed:Australia:Climate-Related Financial Disclosure(proposed).In December

223、2022,the Australian Commonwealth Government Treasury released a Climate-Related Financial Disclosure Consultation Paper.The paper outlines the climate disclosures that certain Australian companies may have to follow in the near future as soon as 2024.Canada:Disclosure of Climate-related Matters(prop

224、osed).Beginning in 2024,large Canadian banks,insurance companies and federally regulated financial institutions will have to provide ESG reporting and climate-related disclosures.Additionally,listed Canadian companies will have to comply with ESG reporting requirements.US:Securities and Exchange Com

225、mission(SEC)Climate Disclosure Standards(proposed).In March 2022,the US SEC announced that it would propose rule changes to require registered companies to include specific climate-related disclosures in their registration statements and periodic reports.Such disclosures would cover information abou

226、t climate-related risks that could have a material impact on their business,along with incorporating key climate-related metrics in their audited financial statements,including greenhouse gas emission disclosures.A final rule was expected in October 2023,but its release is now expected sometime in 2

227、024.Confirmed:EU:Corporate Sustainability Reporting Directive(CSRD).Over the next three years,more than 50,000 organizations(EU and non-EU)will be required to report under the program.The CSRD is anticipated to make significant advancements in reaching Europes carbon-neutral goals by 2050.EU:Carbon

228、Border Adjustment Mechanism(CBAM).This encourages cleaner production in non-EU countries through fees charged by importers for the emissions embedded in their imports.India:This Business Responsibility and Sustainability Report(BRSR)came into effect in 2023 and is the first framework in India requir

229、ing eligible Indian companies to report metrics on sustainability-related factors.Find out moreHow good governance can keep corporates clean from greenwashing:https:/ legislationAdditional insights 32|Global Integrity Report 2024Global Integrity Report 2024|33In response,companies say theyre increas

230、ing their focus on ESG and have already undertaken several initiatives to comply with ESG external reporting requirements.Further,nearly two-thirds believe their organization is transparent about its progress.Despite the activity,there remains a fundamental lack of clarity of purpose,knowledge and a

231、n actionable path forward.Taking an integrity-first approach across all aspects of ESG can help.Organizations need to be comfortable speaking frequently about the importance of ESG integrity as part of their corporate ESG strategy.Organizations also require policies and programs to provide assurance

232、 that ESG measures and reporting address both regulatory requirements in all applicable jurisdictions and fulfill the organizations stated ESG ambitions.ESG integrity reaches a crossroad between aspiration and regulation 12 Waly,Ghada,“UN Global Compact Event:Uniting Leaders for Business Integrity:C

233、an we achieve the SDGs without addressing corruption?,”United Nations:Office on Drugs and Crime,19 September 2023,https:/www.unodc.org/unodc/en/speeches/2023/un-global-compact-event_-uniting-leaders-for-business-integrity_-can-we-achieve-the-sdgs-without-addressing-corruption-190923.html,accessed 12

234、 April 2024.24%2%6%22%40%Very poorFairly poorNeither good nor poorFairly goodVery goodHow would you rate your organizations transparency and communication to the public regarding its ESG initiatives and progress?%of organizationsWhat measures are your company already undertaking to understand and co

235、mply with your organizations ESG external reporting requirements in the regions where you operate?Base:Global(4556).Implementing specific controls or monitoring around ESG metrics and reportingSetting and publishing clear and measurable ESG goals/performance targetsDefining and gathering necessary d

236、ata sets for ESG reporting purposesFormalizing an ESG governance framework,policy and reporting processPerforming research on regulatory requirements Disclosing ESG metrics in public filings and statementsEngaging outside counsel or advisors for legal advice Waiting to see what other companies do30%

237、26%4%Global Integrity Report 2024|3330%32%34%36%37%Organizations will need to be comfortable speaking frequently about the importance of ESG integrity as part of their corporate strategy.Global34|Global Integrity ReportESG integrity reaches a crossroad between aspiration and regulation There are fiv

238、e key areas that organizations need to focus on:1.Make ESG a strategic priority and gain consensus around the alignment of priorities.Overall,62%of global respondents agree that their organization makes ESG a priority.However,there is a perception gap between senior managements confidence they are d

239、oing this(73%)and rank-and-file employees(52%).Further,there appears to be some discrepancy around the alignment of priorities.For example,while board members say their organization is prioritizing climate-related sustainability and greenhouse gas emissions,and responsible supply chain management,se

240、nior management,management and employees believe the top priorities are social responsibility,followed by ethical governance and transparency.Not only do organizations need to establish their ambitions and strategic priorities around ESG,they also need to focus on aligning everyone to these prioriti

241、es.2.Clarify who owns ESG within the organization.Part of the reason for varying views and ESG priorities within the organization may be because typically no single business function owns ESG.If ESG assignments are shared among various functions,well-defined roles and responsibilities should be esta

242、blished,with clear accountability among all stakeholders.3.Implement a robust reporting process.Transparent and accurate reporting are cornerstones of building trust with employees,regulators,customers and investors.One-third of respondents(34%)identified unreliable,inconsistent or inaccurate data a

243、s the greatest ESG compliance challenge.A similar number(34%)identified a top priority of defining and gathering necessary data sets for ESG reporting.Data integrity is a significant risk area within ESG reporting and complying with regulatory requirements.Companies should leverage technology and au

244、tomation to build workflows that gather,compute and monitor performance metrics in a consistent and reliable manner.ESG should be incorporated into existing disclosure and control procedures for external reporting,with tested internal controls and records retention policies that provide assurance in

245、 the quality and reliability of ESG reporting.4.Design and implement an agile ESG governance framework and processes that allow the organization to pivot as ESG regulations change.This is particularly important as new ESG regulations are enacted,such as the EUs CSRD.First,implement a comprehensive r

246、isk assessment methodology that can incorporate new ESG areas and respond to changing international standards.Use risk assessment output to develop measures in the form of KPIs and KBIs against which to measure progress.This includes embedding KPIs and KBIs to track progress and enable accountabilit

247、y for the companys ESG activities and performance.5.Create an effective communication plan that educates,drives consensus and builds trust.Organizations can leverage existing communication channels to promote ESG content,gather information and get people involved.They should start by ensuring employ

248、ees have the necessary knowledge.For example,only 19%of employees profess to understand ESG regulations and their impact on the organization,according to our survey.Increasing the ESG IQ of employees inspires them to take an active role in reaching ESG goals.Moreover,enhancing transparency in a comp

249、anys ESG agenda builds employee trust.Being aspirational about ESG goals remains important.Aligning words with actions while meeting evolving ESG regulations and reporting requirements goes hand in hand with an ESG integrity-first approach.Organizations need to not only establish their ambitions and

250、 strategic priorities around ESG,they also need to focus on aligning everyone to these priorities.34|Global Integrity Report 2024Global Integrity Report 2024|35ESG integrity reaches a crossroad between aspiration and regulation Top areas of focus for your organization with regard to ESG integrity ov

251、er the next two years Which of the below functions in your organization have responsibility for ESG compliance?Global Base:Global(4130).SustainabilityHuman resourcesRisk managementComplianceLegalOperationsFinanceProcurement35%34%31%29%27%26%23%18%Social responsibility Ethical governance and transpar

252、ency Climate-related sustainability and greenhouse gas emissions Fair labor practices Responsible supply chain management Non-climate-related environmental sustainability47%41%38%38%32%26%Base:Global(4556).GlobalGlobal Integrity Report 2024|35Data integrity is a significant risk area within ESG repo

253、rting and complying with regulatory requirements.EY|Building a better working worldEY exists to build a better working world,helping to create long-term value for clients,people and society and build trust in the capital markets.Enabled by data and technology,diverse EY teams in over 150 countries p

254、rovide trust through assurance and help clients grow,transform and operate.Working across assurance,consulting,law,strategy,tax and transactions,EY teams ask better questions to find new answers for the complex issues facing our world today.EY refers to the global organization,and may refer to one o

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256、e under data protection legislation are available via member firms do not practice law where prohibited by local laws.For more information about our organization,please visit .About EY Forensic&Integrity ServicesEmbedding integrity into an organizations strategic vision and day-to-day operations is

257、critical when managing complex issues of fraud,regulatory compliance,investigations and business disputes.Our international team of more than 5,000 forensic and technology professionals helps leaders balance business objectives and risks,build data-centric ethics and compliance programs,and ultimate

258、ly develop a culture of integrity.We consider your distinct circumstances and needs to assemble the right multidisciplinary and culturally aligned team for you and your legal advisors.We strive to bring you the benefits of our leading technology,deep subject-matter knowledge and broad global sector

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