Fraud Prevention Tip #3: The Chief Executive Must Lead the Anti-Fraud Charge
Because they sit at the very top of the organizational pyramid, CEO’s are by definition the Chief Risk Officer – regardless of whether someone reporting to them actually has that title. And when the CEO gives an order, everyone else responds. That’s why the CEO must lead the charge against fraud.
Preventing fraud is a key component of business risk management. Yet it’s often ignored or handled passively by top leaders. The unspoken is, “If we’re attacked, we’ll respond. Until then let’s focus on other issues.”
Certainly not the ‘Tone at the Top’ of effective leaders in this period of daily fraud threats.
So here are four things the CEO must do to lead an Anti-Fraud Campaign for their organization.
- Personal Commitment The #1 executive must personally lead the anti-fraud charge. They can delegate authority for implementation, but they cannot delegate ultimate responsibility for results. It requires a 100% commitment of personal example, time and energy. They can’t be ‘too busy’ because this will permit the ‘too busy’ excuse for everyone else. Others may handle the day-to-day details but it’s up to the CEO to hold them accountable over an extended time for meaningful, measurable results.
- Visible Support The CEO must speak publicly and enthusiastically about the initiative. Along with other Fraud Risk Management leaders, they must be willing to preach the message. They will do this at live events, in written communications, and through technology including video recordings, conference calls, webinars.
- Resources A good business idea is far different from an adequately financed idea. CEOs must provide the resources (time, headcount, and finances) needed to initiate and sustain the anti-fraud initiative over time until it becomes the normal way we conduct business ever day. Our new habits and muscle-memory.
- Safe Environment For Anti-Fraud Campaigns to work, employees must feel both empowered and safe to check details and speak up when something doesn’t look right. Employees must be actively recruited into anti-fraud efforts, and they must be given safe reporting options – including anonymous reporting hotlines for those who prefer to chose this option.
These four items certainly aren’t the whole action list for leaders interested in fraud prevention, but they are a great place to start. They are the critical foundation on which we’ll build a comprehensive response. We’ll cover the rest of the list in future articles.
If you’re the Chief Executive Officer – regardless of your actual title – you know what you have to do. If someone else is the chief executive, your job starting right now is to recruit and secure that support. If you’re serious about preventing fraud for your organization, this isn’t a ‘Should Do’ item for next week or next month. It’s a ‘Must Do’ for action today.
There are a few key lessons I’ve learned from years of assisting clients with their Anti-Fraud Campaigns. This lesson you can take to the bank: Nothing meaningful will happen without strong, consistent, visible, vocal CEO support.
John J. Hall, CPA
John J. Hall, CPA, is an author, speaker and results expert who presents around the world at conventions, corporate meetings and association events. Throughout his 35-year career as a business consultant, corporate executive and professional speaker, John has helped organizations and individuals achieve measurable results. He inspires audience members in corporations, not-for-profit organizations and professional associations to step up, take action and “do what you can.”