Ethical culture

Create an ethical culture that encourages supportive behaviours, while discouraging potentially fraudulent or corrupt activities.

This control targets internal fraud risks.

Examples

Examples of this control include:

integrated organisational values in day-to-day activities
reward and recognition programmes
health and wellbeing training and initiatives
an inclusive and supportive workplace culture
training in and promoting ethical conduct and decision making
leaders demonstrate ethical behaviour by adhering to procedures and being held accountable in the same
way as all employees
open and transparent communication and decision making.

An unethical workplace culture can lead to:

incentives that encourage fraudulent or corrupt behaviour
‘win at all costs’ attitudes that disregard risks or unethical behaviour
tolerance for cutting corners or workarounds
a culture where employees fear retaliation for raising process failures or ethical concerns
bullying behaviour or employees being coerced to 'get on board with the programme’
demoralised or resentful employees who may then rationalise fraudulent or corrupt actions.

Methods to evaluate the effectiveness of this control include:

undertaking an employee survey that includes questions on workplace culture
identifying unethical behaviours through discussion with employees
identifying areas of improvement by completing quantitative and trend analysis of incidences of bullying and harassment, compensation, fraud and misconduct
reviewing completion rates of relevant courses, e.g. ethics training
checking whether employee turnover rates are a result of the organisation’s culture.

Other capability, prevention, detection and response controls that can enhance this control’s effectiveness:

Types of behaviour this control is designed to mitigate:

Explore a range of controls that can be put in place to reduce the risk of fraud happening in your organisation.