As CFO, controller and various other finance and accounting positions during my career spanning over thirty years, I continue to be amazed at how the lack of business ethics continues to be a problem in white-collar America. Cynthia Cooper, former vice president of internal audit at WorldCom who uncovered the $11 billion fraud in 2002 stated:
I have been in two situations in my career where I was asked to exaggerate or falsify financial information by my superiors. In both cases, I declined and was fortunate that my actions did not terminate my employment with those companies. In many cases, employees are put in situations where they are forced to weigh family financial obligations against their business decisions.
Other times, an environment is created that allows for stealing and corruption to exist. Two weeks after becoming CFO at one company, I asked the controller about the status of the bank account reconciliations. I was told that they had not been completed for months. Upon hearing this, I asked that the reconciliations take priority so that we could know our true cash position. Several days later, the controller came into my office and said, “We have a problem”. An accounts payable clerk, who had access to the checking account and was on a leave of absence, had forged the prior CFO’s signature on many checks over the course of two years. Tens of thousands of dollars were stolen but were recaptured, and the person responsible was prosecuted. However, many man hours were wasted in resolving this issue.
I have heard many other stories over the years about unethical behavior in the workplace, and I have come away with two important lessons:
1) Develop policies and practices for ethical behavior and create a business environment that models this behavior every day.
2) Implement processes and controls that will discourage unethical actions from occurring, and ensure that they are being followed.
If these two lessons are incorporated as part of a company’s business practices, a healthy business culture can exist. However, remember that creating an ethical business culture is a process, not a destination.