Creating a Strong Corporate Culture Begins With Managing Fraud Risk
While a strong corporate culture is no paint-by-the-numbers exercise, several vital components must be carefully aligned — namely, ethical behavior, tone at the top, mood in the middle and attitude at the base. These elements are similar to a painter selecting and painstakingly applying just the right mixture of colors and textures to transform the canvas into a work of art. They are of critical concern in today’s boardroom and C-suite. Companies are striving to introduce a measure of introspection to better understand the correlation between culture and ethical failures involving fraud, corruption and misconduct. Key to this movement toward enhanced levels of organizational maturity are growing efforts to measure culture, flag warning signs, make control improvements, address gaps, build awareness of fraud and misconduct risk, and avoid becoming the next headline featuring organizational breakdowns that can derail brand, reputation and long-term viability.
Given the inverse relationship between culture and fraud, where a poor culture leads to high rates of fraud, the results of the latest White-Collar Crime and Fraud Risk Survey from Utica College and Protiviti reveal some troubling trends that should raise concerns for boards of directors and executive leadership.
Notable Takeaways from this Year’s Study:
Survey findings appear to align with “compliance fatigue” and, to a certain extent, complacency that many organizations face
Organizations continue to lag in employing leading practices to build a strong culture
Resources represent a significant challenge in building a strong corporate culture with a clear fraud risk strategy
Many organizations lack a fraud risk management program, including policies to mitigate fraud
Third parties represent a significant gap in fraud risk management