Fraud and corruptions at the organisational level are also social issues
and as many companies as possible should rise to the occasion to
address this issue as part of their corporate social responsibility
(CSR). A recent whitepaper prepared by Deloitte in India jointly with
Federation of Indian Chambers of Commerce and Industry (FICCI)-Aditya
Birla CSR Centre for Excellence, suggested that fraud and corruptions
are not just social issues, but they are critical to business and
therefore, companies have all the more reasons to
tackle the menace of fraud.
“It’s a high-priority mandate for businesses to embrace anti-corruption values as a strategic CSR mission by moving beyond risk mitigation towards proactively solving social problems critical to the business,” the whitepaper said, adding that these are as important social issues as child labour or environment and need to be part of companies’ high priority CSR mission.
“In this current environment, no organisation can afford to be complacent or believe that fraud will not affect them. It is important to stay one step ahead of the ‘fraudster’ and understand the different means of why and how fraud occurs. While the management needs to demonstrate ‘zero tolerance’ to the issues of fraud and corruption, they also need to establish effective risk management practices and a preventive defense to fraud,” said Rohit Mahajan, senior director, Deloitte in India.
The observations made by the Deloitte whitepaper assumes significance in the wake of the fact that the Companies Act 2013 has raised the bar of how Indian companies need to evaluate themselves. Inclusion of some ground-breaking provisions, such as the provisions for shareholders’ class-action suits, are all aimed at increasing the levels of transparency as well as enhancing accountability, eventually leading to stricter enforcement.
Mahajan said, “Whilst we have taken the right steps, I do not foresee change occurring overnight. Good governance, robust enforcement and greater transparency will create a platform on which we need to work arduously to change the global mindset about doing business in India.”
Interestingly, while one has witnessed progress in the reporting of CSR initiatives, the disclosure on lobbying practices and being transparent on sensitive issues is still playing a minor role for many organisations. Companies need to realise that issues arising from fraud and corruption can have an adverse effect on their bottom line thereby directly affecting their ability to compete.
K K Upadhyay, head-CSR, FICCI-Aditya Birla CSR Centre for Excellence, said “CSR is one of the means to foresee change in the paradigm of creating transparency and ethical business practices”.
tackle the menace of fraud.
“It’s a high-priority mandate for businesses to embrace anti-corruption values as a strategic CSR mission by moving beyond risk mitigation towards proactively solving social problems critical to the business,” the whitepaper said, adding that these are as important social issues as child labour or environment and need to be part of companies’ high priority CSR mission.
“In this current environment, no organisation can afford to be complacent or believe that fraud will not affect them. It is important to stay one step ahead of the ‘fraudster’ and understand the different means of why and how fraud occurs. While the management needs to demonstrate ‘zero tolerance’ to the issues of fraud and corruption, they also need to establish effective risk management practices and a preventive defense to fraud,” said Rohit Mahajan, senior director, Deloitte in India.
The observations made by the Deloitte whitepaper assumes significance in the wake of the fact that the Companies Act 2013 has raised the bar of how Indian companies need to evaluate themselves. Inclusion of some ground-breaking provisions, such as the provisions for shareholders’ class-action suits, are all aimed at increasing the levels of transparency as well as enhancing accountability, eventually leading to stricter enforcement.
Mahajan said, “Whilst we have taken the right steps, I do not foresee change occurring overnight. Good governance, robust enforcement and greater transparency will create a platform on which we need to work arduously to change the global mindset about doing business in India.”
Interestingly, while one has witnessed progress in the reporting of CSR initiatives, the disclosure on lobbying practices and being transparent on sensitive issues is still playing a minor role for many organisations. Companies need to realise that issues arising from fraud and corruption can have an adverse effect on their bottom line thereby directly affecting their ability to compete.
K K Upadhyay, head-CSR, FICCI-Aditya Birla CSR Centre for Excellence, said “CSR is one of the means to foresee change in the paradigm of creating transparency and ethical business practices”.
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