The Influence of Directors on Corporate Culture

The deeper and harder we looked, the size and number of frauds seemed to grow until it was apparent that a Senior Marketing Director, in collusion with suppliers, was the ringleader of a secret illegal cartel involving competitors and subcontractors. The cartel would ensure that they had a trusted insider at every major customer, and the insider would receive a small commission when overpriced contracts were awarded. The cartel would divide the spoils, usually to the advantage of the ringleader - the losers were the customers, and often the general public.

The largest beneficiary was in fact the multinational corporation where the ringleader worked. However, the company reported this case to the authorities (with full knowledge of the consequences) and publicly stated that ANY breaches in the code of ethics would not be tolerated. This honest and open statement enhanced the company’s reputation and gained it favourable publicity to a value far greater than the cost of any fines and discounts it had to pay.

• KEY POINT: Profit can be made in many ways, including using unethical and criminal methods: if a company has a strong ethical stance, then it will not turn a blind eye to unethical profits - even when they are “made” by top management

Disclosures in the Fraud-i™ reporting module, as well as during "Understand the Risks" workshops using the Fraud-i™ tool have helped reveal a great deal of sensitive information regarding malpractice and unethical behaviour within organisations.

The results of these findings remain confidential and anonymous.