2019 a year for start-ups to build an ethical culture to prevent fraud
2018 emerged to be a significant year for Indian start-ups with eight companies joining the ‘unicorn club’ (companies with a valuation of USD 1 Billion or more). This has put India behind only the US and China in the number of unicorn start-ups that exist in the world. While this growth is a demonstration of sound business practices and a clear vision for marketplace development, it is also a critical moment for founders and business executives to take stock of the culture and practices within the organisation.
In our experience, we believe entrepreneurs need to look at founding ethical enterprises of the future and need to seed a culture of zero tolerance to fraud early on in the organisation’s evolution when companies enter the growth phase. Our recent India Corporate Fraud Perception Survey, where 58 % of respondents believed incidents of fraud would rise in the next two years, has highlighted diminishing ethical values as one of the top three reasons for fraud. This is despite the belief held by 87 % of survey respondents who said fostering an ethical mind-set amongst employees could prevent fraud. In fact, it is widely seen that aspects such as fraud risk management, regulatory (and other) compliance, and ethical conduct tend to take a backseat to the growth ambitions laid down by entrepreneurs as the business progresses along its growth trajectory.
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