The criminal prosecution is getting tougher. For about 20 years, Austrian white-collar crime has been swinging from an rather lax prosecution to an ever-increasing severity. Additionally, the internationalization of criminal prosecution is becoming more important for white-collar crime. The current prosecution of corporations entails considerable challenges for both the actors concerned and Austria as a business hub.
Our yearly business crime report provides information on how Austrian corporates and decision makers assess the most recent developments and where they see the greatest need for action.
Based on an empirical study by the MARKET Institute under the direction of Dr. David Pfarrhofer this report gives a scientifically sound picture.
The study shows that the current prosecution of corporations entails considerable challenges both for the actors concerned and for Austria as a business location. On the one hand, companies are required to increase their awareness for criminal investigations and media reports. On the other hand, legal framework conditions and their implementation practice become an increasingly virulent topic considering the importance of the business location. This thesis was strengthened within the context of exclusive sounding boards moderated by trend editor-in-chief Andreas Lampl and other participants from politics, judiciary, and economics.
Here are some of the key-findings explored in our report:
The MARKET study documents a relevant increase in business law in- vestigations: 59 percent of businesses report an increase. In thecase of com- panies with 100 to 249 employees, this was even observed by 71 percent. This shows that only 21 percent of the companies surveyed state that the majority of investigations are justified in any case. In the case of the main proceedings, 48 per cent observe an increase.
“The criticism of the long duration of the investigations is massive,” reports MARKET Institute director Pfarrhofer, who made a legally correct distinction between investigation and main proceedings concerning the question of time. The results show that 76 percent consider the investigations to be too slow. 73 percent also perceive this to be the case in the main proceedings. Pfarrhoferstates: “The mood in the main proceedings is similar to the one in the investigations. Although somewhat less clearly than in the investigations, an increase is felt here as well, and the long duration of the proceedings is criticized.”
Economic proceedings can affect not only companies, but also the persons involved. It turns out that anyone and everyone in the management can be affected. “The companies leaders are seen as being particularly exposed – two- thirds of decision-makers nowsee a ‘very high risk’ for this group of people to be affected by white-collar crime proceedings,” reports researcher Pfarrhofer. Another 40 percent see owners at risk.
The MARKET study also brings alarming results when it comes to the assessment of industry risks: A quarter (23 percent) of the respondents estimate the risk of white-collar criminal proceedings as high. MARKET board member Pfarrhofer: “Many companies in Austria reckon that they can slip into proceedings with serious consequences for their image and competitiveness. This is anextremely problematic situation for companies and the entire business location, not only in economically challenging times like this.”
As part of the MARKET study, decision-makers in companies were also as- ked about the consequences of criminal proceedings. It became clear that for about two-thirds (64 percent), even the initiation of investigations repre- sents a serious intervention in the company’s success because of its lasting negative impact on the company’s image. Researcher Pfarrhofer: “When it comes to the Legality as a topic, it is not surprising that a lot of companies correlate with it; even if one takes into account that the regulations to be complied with are becoming increasingly complex.” This is precisely what 59 percent of the companies criticise.
Above all, the leading individuals are seen to be associated with a high risk.
In your opinion, which groups of people have the highest risk of being affected by white-collar crime?
Please assess each group of people from 1 = very high risk to 4 = no risk at all, in between you can grade freely.