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Moscow Times
May 21, 2009
Russians Think Boss Is Corrupt
By Ira Iosebashvili / The Moscow Times

A majority of Russian employees think that corporate fraud will grow in coming years, and only a small fraction think that their management is honest, a survey of Russian and European employees found.

The survey, whose results were publicized on Wednesday by Ernst & Young, interviewed over 2,000 corporate employees in Europe and Russia, the majority of whom worked in companies with over 1,000 staff.

The 64 percent of Russian employees who feel that incidents of corporate fraud will increase in the future cited a variety of reasons, including insufficient attention paid to corporate fraud by management, new risks tied to changes in the business climate, distrust of management and the desire to reap personal gain from the company's activities.

More than a third of the respondents said the risk of corporate fraud was highest during mergers and acquisitions, a time when many employees face layoffs, while others are forced to lighten their workload.

And while 44 percent of Russian employees thought that their companies had increased efforts to combat corporate fraud in recent years, only 14 percent of employees said their employers were "always honest." Slightly more than half said top management was most likely to commit fraud, while a quarter said middle managers were more likely.

Russia perennially places at the bottom of corruption rankings. In a 2008 ranking by watchdog Transparency International, it slipped from 120th to 143rd place out of a total of 163 countries.

President Dmitry Medvedev has promised to make stamping out corruption a priority of his presidency, introducing a number of bills to the State Duma late last year. In March, he submitted a public declaration of his personal income and property as well as those of his family members, leading other top government officials to follow suit.