Some types of economic crimes often attract significantly more attention from government enforcement agencies than others.

Bribery and corruption — along with money laundering and anticompetitive behaviour — arise from the failure of businesses to adhere to the expected code of business conduct established by countries around the world. And several countries, among them the US (with the Foreign Corrupt Practices Act, or FCPA) and the UK (with the UK Bribery Act), are committed to enforcement programmes with stringent standards and stiff penalties.

While it is not the most common form of crime reported, of all the types of fraud covered in our survey, bribery and corruption may pose the greatest threat to global businesses because of the number of business processes it threatens. Sales, marketing, distribution, payments, international expansion, expense reimbursement, tax compliance, facilities operations are all vulnerable processes.

We believe that one driver of the high reported figures of bribery and corruption may be the megatrend of the shift in wealth from the developed economies of the West to the emerging high-growth economies of the South and East — many of which may have different cultural attitudes toward fraud and corruption, fewer regulations, and less-consistent enforcement of those regulations. These conditions naturally create a higher risk profile for this type of economic crime.

Every region reported a significant number of incidences of bribery and corruption. Twenty-seven percent of all respondents who reported economic crime experienced corruption during the survey period, making it the third-highest crime specified and a relative increase of 13% from the 24% reported in 2011.

The financial costs and collateral damage caused by incidences of bribery and corruption — especially in the light of the penalties imposed by governments through increasingly aggressive anticorruption enforcement — can be significant. As the chart below illustrates, regardless of their size, companies that experienced incidences of bribery and corruption more frequently reported losses of over US$5 million.

Losses over US$5M when bribery and corruption was presentWhen an organisation suffered a bribery and corruption event, it was far more likely to report financial losses over US$5M, regardless of its size9%5%1%18%8%7%Experienced bribery and corruptionExperienced fraud but not bribery and corruption+5,000 Employees500 to 5,000 Employees1 to 500 Employees05101520% of all respondents who experienced economic crime over the survey periodSource: The 2014 Global Economic Crime Survey

When an economic crime threatens a company in so many ways, it deserves CEO attention — which could explain the sharp increase in CEO focus on the risks of corruption and bribery in this year’s CEO Survey.