The Sri Lanka Institute of Directors (SLID), in collaboration with its knowledge sharing partner Ernst &Young(EY), held a timely webinar discussion recently on “The Integrity Agenda -the Heightened Role of Boards”. The keynote presentation was made by EY’s ASEAN Forensic & Integrity Services Leader Ramesh Moosa. The webinar was an initiative taken by the Institute’s INED Forum and was extended to all SLID members as well as the clients of EY in Sri Lanka.
“In this social media-driven world, we know that adverse news travels rapidly. Any event of fraud could severely impact an organization’s reputation and will involve a great deal of cost and effort to recover from such damaging, adverse revelation,” said Ramesh Moosa while identifying asset misappropriations, bribery and corruption, and financial statement fraud as common fraud schemes.
He added that the opportunity to commit fraud in current times is heightened by workforce reductions and displacements which adversely affected the operation of internal controls and segregation of duties; remote working may expose access controls to cyber compromises and management overrides and workarounds posed higher risks.
Sharing insights from EY’s Global Integrity Report 2020, a global survey which involved about 3600 respondents, Moosa said that 90% of the survey respondents believed that Covid-19 posed a risk to ethical business conduct in their organizations.
“Defining what integrity means to the business and investing in it, leveraging technology and data to automate, detect and monitor risk indicators, transforming the compliance function and programs to be forward-looking and developing a robust crisis response capability that would secure stakeholders’ trust are four action points for Boards,” said Moosa.
Responding to the moderator’s request to provide his views on the Integrity Agenda for Sri Lankan companies, Chairman of Hemas Hospitals Murtaza Esufally said that integrity, credibility and reputation have always been extremely important.
“In Sri Lanka’s quest for development, we need FDIs and technology transfers to Sri Lankan companies through JVs. Companies in Singapore, Hong Kong, Holland, UK and Ireland get the highest FDIs since they have built a culture of integrity and trust in institutions in those countries” said Esufally.
Chairman of United Motors PLC Sunil Wijesinha said that the majority of Boards in Sri Lanka do give a high priority to the Integrity Agenda and that it varies according to whether or not the company is a public listed company or is in a regulated industry.
“Over the last 10 years, we have seen the regulators tightening the regulations. Hence, there is a lot of pressure on Boards to make sure that the integrity of financial reports and business operations are accurate without any fraud,” he added.
In her closing remarks, the moderator Partner of Ernst & Young Hiranthi Fonseka observed that whilst integrity and trust are not new to Sri Lankans, the discussion on the Integrity Agenda is a wakeup call for Boards to become more vigilant.
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