Lack of ethics and integrity is the cause of all problems.
As we speak now, someone in an organization is stealing from it. ACFE.com estimates an average company loses about 5% of their annual revenue to fraud.
No intervention on its own can stop fraud risk. CEOs don’t want to admit that fraudsters are always ahead of their controls. You cannot solve a problem you have not recognised.
People will always steal as they can justify their actions and have the opportunity to do so without being caught.
Focusing on ethics and integrity training is the best strategy today for all winning organisations because you tend to change the psychology of the fraudster. Let people know it is bad to steal. Nothing can justify their actions to commit fraud. Let them know it is a bad thing and could lead to adverse impact to their partners, children, and relatives if they caught.
And let all staff know that mechanisms exist to bring any fraudster to book. Above all, let your staff know that is good to do the right thing.
Any good CEO must have to get back to the basics. We need to focus on ethical business conduct. Teach our staff good morals. And this ethics training must be communicated to all staff over and over again to all staff. You may have to pick some champions of impeccable integrity. And give them clear indicators to prove their value addition.
At Summit Consulting (www.summitcl.com), we are shifting slowly from forensic and fraud investigations to fraud prevention and proactive forensics.
We need to get back to the basics as a country. Having ethics integrated into the study curriculum from Nursery to University is the best thing to do. For now, companies and all entities must focus on ethics training. I plan to write a proposal to some donors to promote this project.
CEO’s must focus on teaching ALL staff good morals. How do you conduct good business when everyone else wants to play bad business? What is your integrity as the CEO? Do you have morals? Are you and can you be seen to be beyond reproach? Is your ethical hotline effective? Is it managed by one party or many [senior] staff can receive the tip at the same time to avoid suppression? Do you use an anonymous whistle-blower system? Above all, do you mean what you say?
Are you serious about unethical issues when they are reported to you? Do you have systems and mechanisms to investigate such incidents? Do you understand the ‘pains’ of your staff?
The last point is very important.
Having time with some of your staff to listen to their issues may go a long way in preventing many frustrations.
Each country has got its own way of doing things. You need people who understand the local norms especially their mind-set to identify practical case studies to teach them about ethics.
As I make keynotes at most seminars, I realised that we can save a lot by focusing preventing fraud through promoting ethics and a code of conduct.
Otherwise, at the current rate, fraud is becoming big and I don’t see it reducing with this donor aid cuts and financial squeezes. People want to maintain their past lifestyles and will do any thing to do so.
Teaching them how to live within their means, adjusting their lifestyles to fit their earning potential and of course doing the right things all the time is a very good investment.