As many working parents can relate, being engaged in your teenager’s life is similar to being engaged with your employees. Frequent, open and direct communication can lead to building greater trust and understanding.
A common concern of parents with teenage children is one of engagement. Do you know what your children are doing? How are they spending their time away from you and with whom? If you can answer these two questions, you have a good idea of the “risk exposure” for your teenager. Some parents can answer those questions easily because their teenager communicates with them about what is going on in their life. For others, the opposite is true. This puts the parent in the difficult situation of trying to gather information to overcome the teen’s resistance to sharing, and results in anxiety and stress due to the feeling of having a large “unknown.”
In like manner, businesses also benefit from engagement. Of course, in the case of businesses, we are talking about engagement with employees. Roughly 70 years ago, Donald R. Cressey introduced the world to the “fraud triangle”. This schematic was used to represent the three factors Cressey found to be present in his more than 200 interviews of individuals convicted of embezzlement. One of the corners — pressure — was based on Cressey’s observation that the individuals he interviewed a) had some type of financial problem and b) consistently expressed the idea that this situation was non-shareable and, hence, had to be resolved in secret. Think about this for a minute. Are you aware of any employees who are having personal financial problems (e.g., sick relative requiring significant medical costs, loss of job by a spouse, etc.)? Would your employees or team members trust you enough as an employer to share such personal information? Would they see you as someone who might be able to help them find a solution? A real example of the fraud triangle at work is Bernie Madoff – read more about Bernie Madoff and the fraud triangle, as told by Forbes.
When a business experiences occupational fraud, what is the most common refrain? I trusted that person. This statement may be missing the point. A better statement might be “I thought that person trusted me.” Increase your trustworthiness and reduce your risk.
If you would like to talk further about fraud risk in your business, I would be happy to talk to you. Send me a message or give me a call. BDavidson@cdhcpa.com or 630-285-0215