The Bank of Ghana’s 2022 report on fraud (BANK OF GHANA NOTICE NO. BG/GOV/SEC/2023/08) reveals a concerning increase in attempted fraud cases in the banking and Specialized Deposit-Taking Institutions (SDI) sectors. In 2022, there were 2,998 reported cases of attempted fraud, a stark rise of 27.74 percent from 2021’s 2,347 cases. However, despite the rise in cases, the total loss value in 2022 decreased by 7.88 percent to approximately GH¢56million, compared to GH¢61million in 2021.
The most prevalent fraud typologies affecting the sector were forgery and manipulation of documents, fraudulent withdrawals, cheque fraud, cyber/email scams, and cash theft (cash suppression). Notably, forgery and manipulation of documents emerged as the primary fraud typology, resulting in the highest loss of GH¢33million. Another increasing typology was fraudulent withdrawals, which led to losses totalling GH¢7million. Most cases involving fraudulent withdrawals implicated staff members of banks and SDIs. Cheque fraud also accounted for a significant loss value of GH¢5million, primarily involving cloned cheques. However, the good news is that the number of fraud cases involving staff decreased from 278 in 2021 to 188 in 2022. This decline can be attributed to the strict sanctions imposed by the Bank of Ghana and the sector institutions’ advocacy for enhanced controls.
While the banking sector faces its fair share of fraud challenges, it is imperative to acknowledge that other sectors – including public institutions, private companies and various organisations – are not immune to such threats. Though this article highlights the banking sector’s fraud data, it is essential to extend our focus to other sectors where fraud can have equally devastating consequences. From the public sector – including ministries, companies and offices – to private companies and various institutions, preserving integrity and combating fraud is a shared responsibility.
Many institutions and organisations in Ghana proclaim integrity as a core value. Nevertheless, the crucial question remains: Can individuals with high moral standards and integrity engage in fraud with impunity? This issue demands attention, reflection and collective action.
Therefore, this article aims to delve into the concept of integrity, examining how it is demonstrated in different sectors, and explore the potential reasons for the decline in integrity within the system. By understanding these challenges, we can work together as responsible citizens to uphold and improve integrity across all sectors, fostering a trustworthy and resilient society.
The goal is to foster a culture where individuals uphold the highest ethical standards and recognise that integrity is the foundation for a thriving economy and a brighter future for Ghana.
What is integrity?
Integrity is a personal or organisational trait that refers to the adherence to moral and ethical principles, honesty and consistency in actions, values, methods and outcomes. It is the quality of being honest, upright and having strong moral principles, even when faced with difficult or tempting situations.
Individuals with integrity act in a manner that aligns with their beliefs and values, and they demonstrate a sense of responsibility and accountability for their actions. They are trustworthy, reliable and can be counted on to do the right thing, even when no one is watching. Integrity involves being transparent and truthful, and it often goes hand-in-hand with ethical behaviour.
For organisations, integrity means operating in an ethical and responsible manner, upholding legal and moral standards, and being transparent in their dealings with customers, employees, partners and the public. Companies that prioritise integrity are committed to conducting business honestly, fairly and ethically, and they strive to build trust with their stakeholders.
Integrity is considered a crucial virtue in both personal and professional settings because it forms the foundation for trust, credibility and respect. It is often included in a company’s core values to demonstrate their commitment to ethical behaviour and responsible business practices. When individuals and organisations exhibit integrity, they are more likely to earn the trust and loyalty of others and maintain a positive reputation.
Why do companies include integrity in their core values?
Companies include integrity in their core values for several important reasons:
- Trust and reputation: Integrity is a fundamental element in building trust with customers, partners and stakeholders. When a company operates with integrity, it establishes a reputation for honesty and reliability, which can lead to long-term customer loyalty and positive word-of-mouth recommendations.
- Ethical decision-making: Integrity guides employees in making ethical decisions and doing the right thing, even when faced with difficult choices. This helps ensure that the company operates within legal and ethical boundaries, reducing the risk of scandals, lawsuits or damage to its reputation.
- Employee morale and engagement: When integrity is part of a company’s core values, it creates a positive work culture that values honesty, fairness and transparency. Employees feel proud to work for an organisation that upholds ethical standards, leading to increased job satisfaction and higher levels of engagement.
- Attracting and retaining talent: Companies with strong integrity values are more likely to attract and retain ethical and talented employees. Many individuals prefer to work for organisations that align with their personal values and have a strong commitment to integrity.
- Long-term sustainability: Businesses that prioritise integrity are more likely to achieve long-term success. Operating with integrity fosters strong relationships with customers and partners, which can lead to repeat business and sustainable growth.
- Compliance and risk management: Integrating integrity into core values encourages compliance with laws and regulations. By adhering to legal and ethical standards, companies can mitigate legal and financial risks associated with non-compliance.
- Social responsibility: Integrity in business practices extends beyond financial transactions. It also involves being socially responsible and environmentally conscious. Companies that prioritise integrity demonstrate a commitment to making a positive impact on society and the environment.
- Investor confidence: Integrity is essential for gaining the trust of investors and maintaining their confidence in the company’s leadership and operations. Investors are more likely to support and invest in companies that uphold strong ethical principles.
- Business relationships: Companies with a reputation for integrity are more likely to establish strong, mutually beneficial relationships with suppliers, business partners and other stakeholders. This can lead to improved collaboration and business opportunities.
- Legal and regulatory compliance: Operating with integrity ensures that the company adheres to relevant laws and regulations, reducing the risk of legal consequences and associated costs.
Why is it that companies have integrity as part of their core values, yet we hear of stealing and embezzlement in companies?
The existence of stealing and embezzlement in some companies, despite having integrity as part of their core values, can be attributed to several factors:
- Lack of enforcement: While integrity may be included in a company’s core values, the practical implementation and enforcement of these values may not be effectively monitored or enforced. If there is no strong commitment from leadership to uphold integrity and hold employees accountable for their actions, unethical behaviour may go unchecked.
- Ethical dilemmas and pressures: Employees may face ethical dilemmas and pressures in their roles, such as financial difficulties, unrealistic performance expectations, or a competitive business environment. These factors can lead some individuals to engage in unethical behaviour, including stealing or embezzlement, to meet targets or personal needs.
- Organisational culture: A company’s culture plays a significant role in shaping employee behaviour. If the organisational culture does not prioritise ethics and integrity, employees may feel that unethical behaviour is tolerated or even encouraged. A toxic work environment can foster dishonest practices.
- Lack of whistle-blower protection: Employees who witness unethical behaviour may be hesitant to report it if they fear retaliation or lack confidence in the whistle-blower protection mechanisms within the company.
- Weak internal controls: Companies with weak internal controls and oversight mechanisms are more vulnerable to fraudulent activities. Without proper checks and balances, it becomes easier for individuals to engage in stealing or embezzlement without detection.
- Individual ethics: While companies can promote integrity as a core value, individual employees may not inherently possess strong ethical values. Personal greed, lack of integrity, or misguided rationalisations can lead some individuals to engage in dishonest practices.
- Complexity of business operations: In large organisations with complex operations, it may be challenging for leaders to monitor every aspect of the business. This complexity can create opportunities for unethical behaviour to go unnoticed.
Under what circumstances will a staff of an institution compromise his integrity?
A staff member of an institution may compromise their integrity under various circumstances, and these can be influenced by a combination of individual and external factors. It’s important to note that not all staff members will compromise their integrity, and many are committed to upholding ethical standards. However, some potential circumstances that might lead to compromise include:
- Financial difficulties: Employees facing financial struggles or personal debts may be tempted to compromise their integrity to alleviate their financial burdens. This could include engaging in theft, embezzlement, or accepting bribes.
- Pressure to meet targets: In performance-driven environments, employees may feel pressured to achieve unrealistic targets or goals. This pressure can lead to unethical behaviour, such as misreporting data or cutting corners to meet objectives.
- Lack of recognition or reward: When employees feel undervalued or underappreciated, they may be more susceptible to compromising their integrity if they believe it could lead to personal gain or recognition.
- Fear of retaliation: In environments where retaliation against whistle-blowers or those who raise concerns is a concern, employees may be hesitant to report unethical behaviour and may choose to compromise their integrity to avoid repercussions.
- Toxic organisational culture: A toxic work environment with minimal focus on ethics and integrity can negatively impact employees’ behaviour. If dishonesty or unethical conduct is tolerated or even encouraged within the organisation, some staff may follow suit.
- Lack of ethical training or guidance: If an institution fails to provide proper ethics training and guidance to its employees, they may not fully understand the importance of integrity and the potential consequences of compromising it.
- Peer pressure: Employees might be influenced by the behaviour of their colleagues. If unethical practices are prevalent among a group of employees, individuals may feel compelled to conform to avoid isolation or social repercussions.
- Personal values conflict: Sometimes, employees might face situations where their personal values conflict with the actions required by their job. Under such circumstances, they may struggle to find a balance; and some may choose to compromise their integrity.
- Lack of oversight or accountability: When there is a lack of proper oversight or internal controls, the risk of compromising integrity can increase as employees may feel they can get away with unethical behaviour.
What are the effects of loss of integrity by employees on the economy?
The loss of integrity by employees can have several detrimental effects on the economy. Here are some of the key impacts:
- Reduced trust: When employees engage in dishonest or unethical behaviour, it erodes trust between individuals, businesses and institutions. Trust is the foundation of any thriving economy as it facilitates trade, investment and cooperation. When trust is compromised, business relationships suffer, leading to a slowdown in economic activities.
- Increased fraud and corruption: Employees lacking integrity may engage in fraudulent practices, embezzlement, bribery or corruption, both within their organisations and in dealings with external entities. Such activities divert resources from productive use and lead to inefficiencies in the allocation of resources, hindering economic growth.
- Decreased foreign investment: A reputation for low integrity in the workforce can deter foreign investors from entering the country. Investors seek stable and transparent environments, and a perception of widespread dishonesty may discourage foreign direct investment, limiting economic development opportunities.
- Higher business costs: Loss of integrity can lead to increased costs for businesses. This may include expenditures on internal controls, security measures and legal expenses to detect and prevent fraud or unethical behaviour. Additionally, businesses may have to deal with the repercussions of damaged reputations and customer trust, resulting in decreased revenues.
- Impact on government finances: Corruption and lack of integrity can affect government finances directly. Misuse of public funds or bribes to public officials can lead to wasteful spending, reduced public services, and increased public debt, negatively impacting the overall economy.
- Decline in workforce productivity: A lack of integrity can result in a toxic work environment, lower employee morale, and decreased productivity. Employees may feel demotivated if they perceive dishonest colleagues gaining unfair advantages, leading to a decline in overall workforce performance.
- Legal and regulatory consequences: Loss of integrity can lead to legal and regulatory issues for both individuals and businesses. When unethical practices are exposed, legal actions, fines and penalties may be imposed, further straining the economy.
- Damage to reputation: A significant loss of integrity in the workforce can harm the country’s reputation on the global stage. This negative perception can impact international trade, tourism and diplomatic relations, limiting economic opportunities.
What should institutions do to help their staff to uphold integrity all the time?
To help their staff uphold integrity consistently, institutions should take a comprehensive approach that includes the following strategies:
- Establish clear values and ethical standards: Clearly define the institution’s core values and ethical standards, including integrity, and communicate them effectively to all staff. Make sure that integrity is emphasised as a non-negotiable aspect of the institution’s culture.
- Ethics training and education: Provide regular ethics training and education to all employees. This training should cover real-life scenarios and case studies, encouraging employees to think critically about ethical dilemmas they may encounter and how to make principled decisions.
- Lead by example: Institutional leaders should demonstrate a strong commitment to integrity and ethical behaviour. When leaders uphold high ethical standards, it sets a positive example for employees to follow.
- Encourage open communication: Create an environment where employees feel comfortable reporting unethical behaviour or raising concerns without fear of retaliation. Establish clear channels for reporting and ensure anonymity if necessary.
- Whistle-blower protection: Implement robust whistle-blower protection policies to safeguard employees who report unethical conduct. Ensure that whistle-blowers are protected from any adverse consequences for coming forward.
- Recognise and reward ethical behaviour: Acknowledge and reward employees who consistently demonstrate integrity and ethical behaviour. Positive reinforcement reinforces the importance of upholding ethical standards.
- Promote transparency: Foster a culture of transparency by sharing information about the institution’s ethical performance and compliance efforts. This transparency encourages accountability and trust among employees.
- Establish strong internal controls: Implement internal controls and checks and balances to prevent and detect unethical behaviour. Regular audits and independent reviews can help identify potential issues early on.
- Conduct ethics assessments: Periodically assess the institution’s ethical climate through surveys or other means to identify areas of concern and opportunities for improvement.
- Incorporate ethics in performance evaluations: Include ethical conduct as a factor in performance evaluations and promotions. Linking ethical behaviour to career advancement reinforces its importance.
- Provide support and resources: Offer resources and support to help employees navigate ethical challenges. This could include access to ethics counsellors or an ethics hotline.
- Encourage ethical decision-making: Create a decision-making framework that guides employees in making ethical choices. Encourage open discussions about ethical dilemmas and how they can be resolved.
- Consequences for unethical behaviour: Clearly communicate the consequences of compromising integrity and ensure that there are appropriate disciplinary measures for those who violate ethical standards.
- Regular reinforcement: Continuously reinforce the importance of integrity through internal communications, town hall meetings, and other means of engagement.
Conclusion
In summary, the loss of integrity by employees can have far-reaching consequences that extend beyond individual actions. It can harm the economy by undermining trust, encouraging fraud and corruption, deterring investment, increasing business costs, impacting government finances, and reducing workforce productivity. Maintaining and promoting integrity in the workplace is vital for sustaining a healthy and prosperous economy.
It is crucial for institutions to be aware of potential risk factors and proactively take measures to prevent and address compromises in integrity. Creating a culture that prioritises ethical behaviour, providing ethics training, promoting transparency, and implementing robust internal controls are essential steps in fostering integrity among employees and reducing the likelihood of compromising ethical standards.
Individual staff members should also recognise that the consequences of unethical actions can endure beyond their lifetimes. Rome wasn’t built in a day, and rushing to amass wealth overnight not only brings future disgrace, but can also lead to imprisonment and unwanted circumstances. By upholding and guarding their integrity with unwavering determination, individuals not only earn the respect of the world, but also open doors to success. It is vital to understand that all earthly possessions will be left behind, but one’s integrity will remain a lasting legacy. Therefore, preserving and upholding integrity is of utmost importance.
The writer is the Director of Studies and Training, National Banking College, Ghana
Email: [email protected] or [email protected]
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