Corporate Counsel, Corporate Compliance, And The Road Ahead

 

(By Dr. Joseph W. Koletar, CFE, Founding Principal – Behavioral Forensics GroupTM, LLC)

The September, 2017 edition of Corporate Counsel magazine reported the results of a survey done by Deloitte Consulting of corporate General Counsel executives:

“Survey: GCS Fear Workers Will Let Lapses Slide” (p.10)

The survey was released by Deloitte Consulting’s Don Fancher, a Principal in Risk and Advisory Services, and also U.S. Forensic Leader.

The survey is instructive, in that there appears to be a “disconnect” between what corporations want, and are mandated, to do with regard to compliance, and what actually happens.

The survey is based on 930 responses from C-Suite Executives and other Executives, and reflects a concern that employees still struggle with issues of ethics and compliance. The root causes, per the survey, are the apparent inconsistency of “…clear, concise, and frequent ethics communication and training…” These shortcomings seem to be common at all levels of the reporting corporations.

Analysis of the survey offers, however, an intriguing possibility. Fancher’s report indicates 52.4 percent of responding executives believe global corporate ethical behavior has improved since the enactment of the Sarbanes-Oxley Act in 2002. At the same time, the report  indicates that only 41.3 percent of respondents believe their companies’ global ethics cultures are “strong.”

The survey concludes that shortfalls in the ethical arena may be due to:

  • “…lack of incentives and repercussions surrounding ethical and unethical behavior….”
  • “…varied ethical postures of third parties…”
  • And “….differing ethical standards for various employee groups.”

The Behavioral Forensics GroupTM takes no issue with the survey’s findings, but suggests yet another dimension to the ethical conundrum – the psychology of the parties involved. Our work and experience informs us that the three primary actors in any ethical scenario are: the initiator, the victim(s.) and the witnesses/enablers. Each has distinct psychological profiles that create and, indeed foster, unethical acts. While much speculation, and some research, has been done on the initiator (e.g. Madoff), almost none has been done on the victim(s) and witnesses/enablers.

Starting in 2010 through the present such issues have been the sole focus of our consulting practice and the impetus for our 2013 book, “The ABC’s of Behavioral Forensics.”

 

The author, who served as a Director in the Fraud and Forensic Practice of Deloitte&Touche, LLP from 1994 to 1999, may be reached at 910-612-1323, or jwk357@aol.com.

 

BEHAVIORAL FORENSICS GROUPTM LLC

 

The Behavioral Forensics GroupTM LLC is a team of professionals with vast experience in detecting fraud, understanding why it occurs, and in recommending steps to mitigate fraud incidence within the corporate workplace, particularly within higher-level (and therefore more costly to the enterprise) executives.  The fields of investigation, organizational psychiatry, accounting and behavioral forensics, and law enforcement are represented within the Behavioral Forensics GroupTM LLC.  Acting in synergy to help organizations prevent, find, and/or reduce fraud, B4GTM is a premier, pioneering practice in this field.

We are blogging at: http://www.bringingfreudtofraud.com

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