Ethical dilemmas. We find ourselves in these situations every day. Do I cut the person off in the lane next to me so I can get to work on time? Do I go back and pay for the grapes that were hidden at the bottom of my grocery cart that the check-out person missed? Do I lie about my address on my daughter’s registration forms to get her into a better public school? Do I report the contract work I did on my tax forms?
Just as these ethical dilemmas show up in our personal lives, so, too, do they follow us into the workplace. In the educational session, “Mastering the Edge of Ethics,” John Hurlimann, CFE, Sr. Investigations Manager of Intel Corporation, encouraged attendees to re-evaluate their standards of ethics, recognizing how ethics can be both good and bad for business.
Growing up in northern California on a cattle ranch, Hurlimann reflected on the power of his father’s word in business deals. His reputation was based on his integrity. The more honest he was, the more business he received.
Consequently, a poor ethical culture can lead to more than just one missed deal or a few lost contracts. Hurlimann highlighted the devastating effects of the choice made by employees at Volkswagen to cheat their emissions tests. These choices impacted more than 11 million cars, cost more than $7.3 billion and dropped the car giant’s sales 5 percent overnight.
Companies, just like individuals, typically make decisions in two ways. The first way, deontological, is making a decision based on rules. For example, I don’t speed because it is against the law. (Don’t quote me on that.) The second, utilitarianism, is making a decision based on what seems like the greatest good. It can be a rationalization for violating a rule or thinking “the means justifies the end.” Think Robin Hood or the hacking group Anonymous. Both examples of people that feel like the work they do, though illegal and unethical, is worth it because it helps others.
The utilitarianism decisions are where many people find themselves at the top of a slippery slope. But, according to Hurlimann, there are many actions a company can take to take an organizational approach to ethics in order to keep employees from taking advantage of any opportunities to commit fraud.
Some of the immediate actions companies can take are:
- If we have heard it once, we have heard it a thousand times: establish a rock solid tone at the top. It isn’t enough to just say you are against fraud, company leaders need to show it. Be present in communications regarding fraud policies, be transparent with findings and hold people accountable. Hurlimann referenced this quote from GE’s General Counsel and Senior VP, Alex Dimitrief, “In my opinion, 10 minutes from a company’s CEO, 10 minutes from the CFO and 10 minutes from the General Counsel at a staff meeting or town hall discussing why integrity is important to a company is worth thousands of hours of training.”
- Employees have to trust that a reporting network is going to work. You must have a zero tolerance policy on retaliation. Hurlimann said that at Intel they send a simple message back to anyone that reports fraudulent activity that reads, “Thank you for your submission. The action may not be visible to you, but we have reviewed your report and taken the appropriate action.”
- Offer multiple ways for people to come forward. This could be through a hotline, email, letters or in-person; make sure all ways are encouraged and enabled. “Fifty percent of the significant matters that we closed in the European regions was someone walking into our office and saying they had concerns in person,” Hurlimann said. To him, this is an important distinction to make when developing reporting mechanisms across the world. What may work best in one country and culture may not be successful in another.
- Take action when something happens. Hurlimann said that you have to publicly hold people accountable either via coaching, a written warning, termination or reaching out to law enforcement.
Ethical dilemmas, whether personal or professional, will continue to haunt the most respected and dedicated fraud fighters. But, recognizing their presence and creating a clear policy upheld at the highest levels will give employees the knowledge to step away from the top of the slippery slope on which they may one day find themselves.