Navigating integrity challenges in Southeast Asia

IN BRIEF: • Ethical risks remain a significant concern for businesses in Southeast Asia. • Major issues include a weak integrity culture, third-party risks, and inadequate whistleblower protections. • Organizations must focus on leadership accountability, governance of third-party relationships, and the integration of environmental, social, and governance (ESG) values into their core operations.

- RODERICK M. VEGA

Southeast Asian organizations are facing substantial ethical risks that threaten their business stability, despite notable advancements in compliance measures. As the region’s economies continue to expand, the need for a robust integrity framework has never been more critical. Rapid economic growth often brings about increased competition, which can lead to ethical compromises if not managed effectively.

Companies must navigate a complex landscape characterized by diverse regulatory environments, cultural differences, and varying levels of enforcement. This makes it imperative for organizations to both comply with existing laws and foster a culture of integrity that permeates every level of their operations.

The EY Global Integrity Report 2024 highlights these pressing concerns, drawing insights from over 5,500 board members, managers, and employees worldwide. The report serves as a vital resource for organizations seeking to enhance their ethical frameworks. As Southeast Asia continues to develop, the region must address these integrity challenges head-on to ensure sustainable growth and maintain stakeholder trust.

THE NEED FOR A STRONG INTEGRITY CULTURE

The survey indicates that while 71% of Southeast Asian respondents report improved integrity standards — outpacing the global average of 49% — there remains a troubling tolerance for unethical behavior among senior management. A staggering 44% of respondents believe that unethical conduct is overlooked by leadership, compared to 31% globally. This discrepancy reveals a “say-do” gap, where the ethical commitments of leadership do not align with their actions.