I recently did an interview with Sam Steele (that’s him at the right), the face of The US3 Report. He interviewed me on Corporate Fraud & Embezzlement, and of course, gave me a chance to promote my new book Essentials of Corporate Fraud.
The US3 Report calls itself: “The Ultimate Safety & Security Resource for the Business Executive.” Subscription to this resource is by invitation only, and is purposely capped at a small number, to ensure that subscribers are the recipients of exclusive information.
Much of the information in the monthly reports revolves around personal security and protection for the high-profile and/or high net worth individual. It’s clear that these types of people are bigger targets for criminals, both those committing physical crimes and those stealing identities and other personal information.
In our interview, which lasted over two hours, here are just a few of the questions Sam had for me and my riveting answers.
Sam Steele: Tracy, in your opinion, would you say that corporate fraud and/or embezzlement are on the rise? And I guess – I’m not sure which way you’re gonna go with this. But why do you think that’s the case?
Tracy Coenen: I actually feel like fraud is not really on the rise, that it is staying fairly stable. I think that to a lot of people, it seems like there’s more fraud than there used to be, because there’s been a lot more publicity about fraud. And if there’s anything good that came out of the big frauds like Enron and WorldCom, to me it was that the issue of fraud is being publicized more.
And I think that the more that people hear about fraud and are aware that it’s going on, the better they can protect their own companies that they own, or that they’re executives at. And so there’s been more publicity, which I think to the casual observer makes it seem like there’s more fraud.
To me, as an industry insider, I don’t feel like there is more fraud, that it’s not on the rise. But one of the interesting things about the incidence of fraud is that companies really haven’t put much of a dent into the occurrence of fraud. Surveys have been done of executives who feel like they really have done a good job in increasing their fraud prevention efforts.
Unfortunately, the numbers bear out that they really haven’t done a whole lot. The incidence of fraud isn’t decreasing. So it’s not increasing. But it hasn’t been decreasing either.
Sam Steele: Okay. Tracy, in your expert opinion, who or what is the ideal target for corporate fraud or embezzlement?
Tracy Coenen: Any company of any size can be hit with fraud. So nobody is immune to it. But some of the key things that I have seen in companies, that seems to put them at a little more risk for fraud, are some fairly basic types of things. We’re talking about something like not having an ethics policy, or having an ethics policy that isn’t really enforced.
And where an ethics policy comes in is: it gives employees an outline of expected behaviors. I think that a lot of companies wrongly expect that their employees automatically know what’s right and what’s wrong in the workplace.
And I think that’s a really dangerous assumption. I think it’s real important for us to lay out some expected behaviors for our employees, make sure they know what we deem right and wrong in our company.
Sam Steele: Okay. Now to me, Tracy, that’s fascinating. I’ve owned actually three businesses now in my brief history as an entrepreneur. And I think I’ve personally made this mistake time and time again. Because I think I’m just too trusting of people.
And I kind of assume people are gonna have the same values and know what’s right and wrong – that I do. And it just seems odd to me that it’s so important to spell this out. I mean what –?
Tracy Coenen: Right.
Sam Steele: Go ahead.
Tracy Coenen: I think the mistake that’s being made is that you are assuming your employees have the same code of ethics as you do, and have the same moral values as you do. And really, if we went down the line and asked ten people if a certain act is right or wrong, we might get four different answers out of those ten people.
And so it’s real important that we don’t allow employees to substitute their own judgment for ours, that we tell them certain things are right, and certain things are wrong.
Note: Take a look at the website of The US3 Report. The report is absolutely amazing. Sam gave me a complimentary copy of January’s report, and I was blown away at the amount of information and the relevance for a business executive like myself. Get in on it while there are still subscriptions available!