Only half (51%) of business leaders in the construction sector have confidence in their bribery and corruption controls, 18% below the global average (69%), according to new research from the latest Global Fraud and Risk Report released by Kroll, a division of Duff & Phelps, the global leader in risk mitigation, investigations, compliance, cyber resilience, security and incident response solutions.
Kroll’s annual Global Fraud and Risk Report, with research conducted by Forrester Consulting, examines the current global risk landscape, understanding the biggest risks facing global companies and the steps being taken to prevent, detect and respond to daily threats.
The report revealed that 60% of construction firms have been affected by political unrest over the past 12 months, more so than any other sector. Similarly, almost 40% (38%) have also been affected by disruptions due to sanctions, tariffs and changes in trade agreements—second only to the technology sector. Leaks of internal information have also been a challenge for the sector with almost half (45%) of firms reporting an incident within the last year.
Looking forward, the construction industry is also more concerned about economic and political instability than other sectors, including concerns about military conflict (64% vs. 51% global average), a significant financial crisis (77% vs. 69% global average) and market manipulation through fake news (70% vs. 59% global average).
To tackle these concerns head-on, it is clear that the construction sector needs to strengthen its risk management capabilities. Currently, the sector’s confidence in data analytics (66% vs. 77% global average) as a risk detection method is the lowest of all industries surveyed. Internal audit functions within the sector are also less likely than average to uncover threats (24% vs. 28% global average).
Matthew Weitz, Associate Managing Director at Kroll, a division of Duff & Phelps comments: “With increasingly tight deadlines, ever increasing pressure on profitability, a high dependency on contractors and complex global supply chains, the construction sector is particularly vulnerable to bribery and corruption risk. We are seeing more and more construction companies tackling these issues head on by implementing a combination of preventative measures, ongoing detection and monitoring, and responding to potential problems swiftly, in a robust and consistent way.”