Ever thought about speaking up..?

Recently the team at Core Integrity critically assessed the report into different whistleblower procedures by Griffith University professors Brown and Lawrence.

The report focused on strengths, weaknesses and differences in general across corporate, government and not for profit organisations.

Among the key take outs for us were:

  • The lack of formal whistleblower policies and procedures in place
  • The lack of education and training available to those responsible for managing whistleblower programs
  • The lack of protection for whistleblowers
  • The negative impact on culture felt in organisations where people don’t feel safe to speak up

The results were broadly as expected with government industries having the most procedures in place, then corporate firms then not for profit organisations.

Professor Brown said, “The fact that even the most advanced public sectors are also still weak on support and protection processes, confirms the need for new thinking and improved, smarter standards across the board”.

A parliamentary inquiry has just been completed to examine best practice criteria for legislation and recommendations for reform across all industries. Talk to us today about the results of the parliamentary inquiry and how to adopt the recommendations in you organisation.

Ready to unlock the value of experience based learning?

Looking for the next leap forward? Want a simple and effective competitive advantage for your people in a single day? Sound to good to be true? It isn’t.

It’s all about how you go about it.

eLearning, lectures, seminars and face to face training are all valuable education and awareness tools for your organisation, but to really give your people and organisation a competitive advantage experience based learning is the missing ingredient to reach new heights.

Talk to us today about how our experience based learning suite will compliment and improve your existing learning program. Tailored and targeted to meet the specific needs of your board, executives, management, staff or players.

Lead the way.

 

Worried about black swans?

“There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know.”

 – Former United States Secretary of Defense Donald Rumsfeld.

Black swans, unknown unknowns, latent and high risk incidents…. Fraud and integrity risks are likely to impact your business. But did you know they can be detected early and successfully managed, or even prevented all together? Are you aware of the fraud and integrity risks waiting to impact your organisation?

Proactive fraud and integrity risk management provides your organisation the greatest return on investment in the market. In 2016 the median loss per incident was $150,000, with 23.2% of cases causing losses of $1 million or more.*

Talk to us today about the proactive steps you can take to prevent the harmful effects of these unmanaged risks on your people, brand, reputation and financial strength of your business.

*ACFE Report to the Nations on occupational fraud abuse, 2016 Global fraud study.

Best Practice Misconduct Investigations

Does your corporate or sporting organisation have the capability to conduct best practice workplace misconduct investigations following due process and natural justice? Are you confident of investigating and tabling allegations to employees within applicable laws and regulatory requirements? Do you know the trigger point for when an independent investigation is necessary?

Recently English soccer striker Eniola Aluko spoke out about bullying. One of the fallout issues was the investigation of the complaint itself. Aluko alleged she was victimised as a result of speaking up, evidence was overlooked and key witnesses were not spoken to as part of the investigation process.

Aluko said, “If anybody, was going through something difficult in the team right now, would they speak out? That is the most damaging thing about this because if you think of a young player, for instance, who wants to play for England in the future – let’s say a young black player – she’s going to look at this and go: ‘If anything ever happens to me, what happened to Eni Aluko? I can’t say anything.’ That to me is the most heart-breaking thing.

“I do not think players are going to feel confident sharing grievances…  That’s dangerous, if players feel like they cannot speak out about certain things.”*

Core Integrity conduct independent, confidential workplace investigations to ensure the welfare and protection of all parties. All matters are investigated with best practice and within applicable law to ensure you get it right the first time.

Talk to us today about our workplace misconduct investigations and our Integrity Hotline which allows your people to speak up safely.

*Reference at http://m.bbc.com/sport/football/40995165

Dirty Rotten Scoundrels

 

We are all familiar with the 1988 classic comedy film Dirty Rotten Scoundrels, starring Michael Caine and Steve Martin, where two con men from different backgrounds try to out do each other in swindling $50,000 from a wealthy heiress. The film is set in the French Riviera where the rich and famous play. As the movie plays out, both men try and out do each other to gain free meals and access to large sums of cash.

Sound familiar? If you have been paying attention to the news over the past few years it sounds like it could be set in a local council, state government ministers office or union headquarters.

Dodgy councillors, crooked government ministers and entitled union reps. The past few years has seen a raft of public officials exposed for fraud and corruption ranging from multi-million dollar frauds, conspiracies to defraud, large scale bribes and kick-backs, not to mention the misuse of public and member contributions to fund lavish their lifestyles.

It’s great to see some of these issues starting to get exposed but the real question is: Just how big is this problem?

Answer: I reckon its Big with a capital B. This is only just the tip of the iceberg.

The disturbing part is to stop and think for a moment at just how long this type of behaviour has been going on and just how much money has been defrauded and misused across councils, unions and government departments over the years.

There is no doubt the tide is turning in the court of public opinion, perception and expectations when it comes to this dodgy conduct.

Whilst it has never been acceptable to commit fraud, have undeclared conflicts of interest and use public money as your personal piggy bank, the tide is now turning with those witnessing dodgy conduct more willing to speak up and report it.

What is interesting is that in the public sector there are pretty strong mechanisms in place around fraud and corruption as it relates to public officials. There is prescriptive legislation by virtue of the Public Interest Disclosures (PID) Act which outlines expectations, requirements and protections for those making disclosures on fraud, corruption, misconduct and maladministration.

The legislation is often supported with various government agencies charged with investigating corrupt conduct involving government employees and public officials.

When compared to the private sector, the government appears to be streets ahead from a policy and legislative perspective. And perhaps the scandals that have come to light over the past 5 years around the country are indicative of the progress being made.

Despite these scandals, I suspect the problem is much, much bigger than any of us realise across federal, state and local government departments when it comes to undeclared conflicts of interests, hidden beneficial ownership in companies, kick-backs and cash-in-kind benefits. Likewise in the private sector, I suspect there is far more fraud and corruption than is being uncovered.

The relative success achieved in the past few years across both the public and private sector in uncovering fraudulent conduct and corrupt schemes should be applauded but it’s just a start of what is sure to be a long journey as we turn the dial on integrity and appropriate conduct.

To support this we need strong public messaging from government and corporate leaders far more regularly who make it clear that this type of conduct is not acceptable. And for those being caught, strong sanctions need to apply. I was thoroughly impressed (which is rare) in the sentence handed down to former NSW Resources Minister Ian Macdonald who was sentenced to 10 years for misconduct in public office. It is tough sentences like that, along with sacking and referral to police for private sector employees that will assist in turning the fight against fraud and corruption.

It is often easy to enact a new piece of legislation or a new corporate policy to say that you are taking these issues seriously however one of the most important aspects often overlooked is the effectiveness of your underlying operation to support the policy.

Here are some questions to consider:

How does it work in practice? Do the leaders of your organisation regularly promote their position on speaking up? It is one thing to have a policy and tick the box but how often do the leaders of your organisation talk about fraud, corruption and the organisation’s expectations? Leaders should be weaving into their messages regularly their stance on encouraging people from across the organisation to speak up.

Can your employees or members report issues safely and easily without fear of either being identified or suffering retribution? Can they report suspicions without being ridiculed? I often hear from those charged with managing their fraud and corruption response that they don’t want people to report all kinds of issues, have too many reports and so on. This is crazy talk. If you set the tone and make it safe to speak up you can put measures in place to effectively assess reports. Sometimes you need a few data points on an issue to launch an inquiry, if you discourage people from reporting hunches or suspicions you might miss an issue.

Is there a clearly defined process for assessing those reports and ensuring there is an independent approach to investigating the issues? Too often organisations handle tip offs internally which discourages people from speaking up, especially against senior executives for fear the matter will be swept under the carpet. An email managed by the CEO or Company Secretary’s PA. This isn’t really an effective way to encourage people to speak up. Sure you have ‘ticked the box’ and complied with your obligations but more can be done.

Are there the right mechanisms in place to protect those who speak up? How often do we hear about a whistleblower or someone who speaks up being made redundant a few months later through an organisation-wide restructure? Too often and it’s disgraceful. Have a person charged with overseeing your whistleblower or PID program is essential and their role is to ensure that both the protection and welfare of the person reporting is maintained.

Do those investigating have the right skills, capabilities and independence to do their jobs effectively? How many times do we hear about a personal assistant, the cleaner (joking) or chief executive conducting the investigation themselves? Too often. Last time I checked there aren’t too many PAs or CEOs who have been trained to conduct investigations, interview witnesses and table allegations to those suspected of committing fraud. There should be a clear separation between those charged with looking into an issue and those who will review the outcome and make a determination regarding consequence. Sounds simple I know but you would be surprised how often this doesn’t happen.

Lastly, does the organisation walk the talk when it comes to consequences? Once fraud or misconduct has been proven do they do the right thing and take appropriate action on those found guilty by terminating their employment and where they suspect criminal conduct refer to law enforcement? This is one of the biggest areas where all organisations tend to let themselves down. Too often I hear of examples where companies fail to apply an appropriate outcome, refer the matter to law enforcement and communicate to the rest of the organisation the consequences of committing fraud.

In Dirty Rotten Scoundrels, we see our two main characters Lawrence (Caine) and Freddy (Martin) so focused on their own misdeeds that they fail to realise that they have in fact been duped themselves. The parallel here is for those charged with mopping up a fraud or corruption issue. Don’t get so bogged down in the issue and trying to keep it quiet that you miss the bigger opportunity in front of you. Be firm on applying an appropriate consequence for those who commit fraud, be as clear and transparent as you can legally in your communications to the rest of the organisation regarding what has happened and what actions you and the organisation have taken.

It might not seem it at the time, but you have a real opportunity to turn a negative incident into a positive learning opportunity for your organisation.

$165m ATO Scam: When the byline becomes the main story

cranston

The story of the week has to be the massive $165m tax fraud involving the son and daughter of senior ATO employee Michael Cranston, who are facing charges of fraud.

As details emerge regarding the extent of the scam, the cash and assets seized (including 2 planes can you believe it???) the scam itself is now no longer the main story.

The main story now centres around Michael Cranston himself, the ATO’s Deputy Commissioner, following him being charged with abusing his position as a public official for allegedly trying to access confidential information of an ATO audit into his son, Adam. To read more about the story click here

The Australian Federal Police (AFP) have been quick to say that there is no suggestion that Michael Cranston was involved in the $165m scam, or that he had any knowledge of it. That may be true. Whether that remains the case as the investigation continues and more information is uncovered I guess only time will tell, but this incident serves as a reminder to all of us.

A reminder about the importance of remaining vigilant within your organisation when it comes to fraud, corruption and integrity. Even the most mature and robust organisations face incidents of fraud, corruption and impropriety – it’s just a fact of life and a part of doing business. Protecting your reputation, your people and your bottom line is not a fixed target. Successful organisations continually assess, monitor and strengthen their internal policies, processes and education to minimise the incidence and impact fraud and integrity issues can have on them.

It’s also a reminder of what can happen to even the most honest and trusted person when the right set of circumstances collide. When it comes to fraud and white collar crime, we often talk about the Fraud Triangle, a theory developed by Donald Cressey in the early 1970’s, where Cressey theorised that for an ‘ordinary person’ to commit fraud three factors needed to be present:

  1. Pressure – this is what motivates the person to commit fraud or an integrity breach. They have an unshareable pressure or situation that they can’t resolve legitimately.
  2. Opportunity – person has access to information, systems or money by virtue of their role and breach the trust placed in them by the organisation, their peers and society.
  3. Rationalisation – the person doesn’t see themselves as a criminal or a bad person, but rather someone caught in a predicament or a short-term crisis. They rationalise their behaviour to justify to themselves their actions – “I will pay the money backnext week…”

I am not sure what constitutes an ‘ordinary person’ these days but I think Cressey was saying those of us that aren’t career criminals.

No matter how high your position, how experienced you are, how much training you receive during your career, we need to keep in mind that everybody is susceptible to committing fraud and corruption. Yes, everybody.

Given the right set of circumstances we are all susceptible to being compromised. Some reading this might say “rubbish, I would never do something like that!” And I hope you are right. What is probably more accurate is that you have never had to consider doing something improper because you haven’t had a pressure in your life so great that you couldn’t share it with others due to embarrassment and couldn’t seek advice or assistance to resolve it. You haven’t felt trapped with no way out.

We don’t know why Michael Cranston did what he did, if he in fact did what is being alleged of him and if so, what factors existed that might explain his actions. Like all of us, he deserves the presumption of innocence as this matter plays out.

But the lesson here is that organisations can never rest on their laurels. Protecting your organisation is not a set destination, it’s an ongoing journey. Top organisations know this and continuously invest in strengthening their policies, assessing their risks, tightening their internal controls and educating their people. Risks change over time, so too should your organisation.

I feel for the good folks who work at the ATO right now. I’ve dealt with a few of them during my various roles over the years and I know first hand the organisation is solid and is committed to being ethical and stamping out tax fraud.

The ATO employs approximately 20,000 people across Australia. This week we are talking about three of their employees. Spare a thought for the other 20,000 or so who do the right thing, come to work everyday and give their all but because of the actions of a small few they are all being tarnished this week.