All too often we see attitudes of corporate arrogance and a general indifference for ethics.
This is all too common within large organizations who noticeably are driven by compliance and regulatory pressures. The obvious obsession with compliance narrows the scope of their lenses, limits their understanding and appreciation for ethics, and ignores the most valuable asset in the organization— employees.
No individual or organization can deem themselves bullet proof; immune to poor ethics and illegal conduct from taking hold. To think otherwise is a gross miscalculation and points to failed leadership on many levels.
In a recent corporate presentation in front of executives and business owners, I postulated the following points:
1) The single biggest problem we have on this planet is the lack of personal ethics and significant amount of systemic/moral rot. Every major problem on our planet can be directly or indirectly tied to it.
2) Fraud is everywhere and is the genesis of humans taking shortcuts that are rationalized and justified as no big deal.
Some naysayers might read this and say “Mark, we haven’t been burned and see no reason to review our culture, mission, systems, and policies.”
To those of you who might feel this way, I would ask you whether you ever hired the wrong employee, spent endless time and resources correcting the mistake, or was involved in a discrimination suit.
These types of mistakes can be traced to cultures not emphasizing their values, principals, and ethics. Depending on the size of the issue, it can have a punishing effect on an organization’s bottom line.
Fraud comes in different colors and sizes. The following are common types that hit small businesses hard:
1) Skimming- cash is typically stolen from the company before it is recorded in the systems and on the books. For example, an employee accepts payment from a customer but doesn’t record the sale.
What is the remedy? Receipts must be issued for every sale and all cash balances are totaled daily.
2) Billing- excess purchases can indicate fictitious payees or payoff of purchasing agents.
What is the remedy? Require signed approvals on all purchase orders and expenditures. Audit monthly purchases and look for irregular patterns. It’s a good idea to separate functions involving approval of invoices and issuing payments.
3) Expense accounts- employees are padding expenses or claiming expenses that never occurred.
What is the remedy? Receipts are required and written explanations on all expenses over $10 must be submitted. Signatures are necessary on all reimbursements and it is important to scrutinize historical trends for reasonableness.
4) Bribes- This can be defined as anyone receiving, giving, or offering something of value for the purpose of influencing a particular act without the consent of owners or the principals of the organization. It is not uncommon to see proprietary information leaked to a vendor or customer to gain favor or inflating invoices from a vendor and receiving kickbacks.
What is the remedy? Periodic auditing of sales and purchase transactions is essential to detecting signs of possible fraud. Depending on the size of an organization, it is probably a safe bet to consider doing this at least on a quarterly basis to prevent further systemic rot.
There are many other sinister forms of fraud that take place daily in our workplaces and it is in our collective interests to root them out.
No individual has their arms around ethics or human conduct.
I take that back…….God does.
There is no place for arrogance, greed, or entitlement in our personal or business lives. These traits are truly poisonous and can easily prevent meaningful relationships from flourishing.
I urge you to be ever vigilant about your ethics, conduct, and your daily deeds.
Complacency leads to false comfort and feelings; ignorance can accelerate into major blind spots that we might not see.
Be your best every day and be a good role model for others. Any selfless good deed always trumps a convenient soundbyte.
Best/blessings,
Mark
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