Fraud Prevention Tip #9: Every Executive, Manager and Supervisor Must Lead by Example
In building an anti-fraud culture, clear strong policies are important. But policies without consistent daily example by leaders will leave employees, suppliers and others confused when making critical decisions.
Here are four attributes of leading by example.
1. You protect your signature and everyone knows it.
Before you approve any transaction, you spot check details, ask questions and demand answers. And you do it efficiently to keep the paperwork moving
forward on time. Your team knows that you’ll check for accuracy and completeness before signing, and as a result they make sure that supporting documentation and explanations are in order before submitting anything for you to approve.
You have a reputation for quality in all that you oversee, and you coach your subordinates to act in the same manner. Others in the organization see you and your team as the example of how to prepare, review and approve all transactions. Result: fraud does not happen on your watch. Mistakes are just as rare.
2. You want to know about problems – right away.
As a confident leader, you want to know about what might go wrong. You want to anticipate potential problems and address them quickly. You tell your team this regularly. You leave know doubt. Your team knows they can come to you without fear because you have created a work environment where others know you want to hear about potential issues right away.
Let’s face it. We never really want to hear bad news. But despite this natural resistance, you say, “You are our first line of defense against fraud. Come to me with anything doesn’t look or feel right to you. Come to me with your concerns. Come to me with some suggestions for fixing those issues, as well.”
It’s a delicate balance that needs to be struck in soliciting people’s input about the risks and concerns they face. Especially when it comes to fraud. But you err on the side of asking for their help. That’s what strong leaders do.
3. You coach your employees on fraud risks.
Few employees start their career with a deep knowledge of fraud risks. It’s just not a core skill. Strong leaders compensate for this gap by proactively teaching their staff about what can go wrong in what they see and handle. Open brainstorming is the norm, not the exception.
You know you are on the right track when they start to say, “I think this could go wrong.” Then you need to help them think through:
• Could it really happen?
• Is it happening?
• What would it look like in the documents we see every day?
• What can we do to be more effective in preventing it?
• How would we catch it immediately before harm is done?
4. You eliminate bends in the system.
Leading by example includes eliminate the bends in the process. Bends in the manufacturing environment occur whenever liquid is pumped through a pipe and hits a 90-degree bend. That bend in a pipe slows down the flow – requiring more energy and pressure to be consumed to keep the process ‘flowing’.
The same is true in process flow in your department. Every ‘bend’ or step that slows things down wastes energy. It requires your team to expend more pressure and energy to keep your work processes flowing.
Strong leaders are constantly looking for anything that slows down their team’s processes – and leaders take action to make processes more efficient. Result: greater free energy for important tasks including spotting hidden problems like fraud. We need leaders who want to eliminate the bends that get in the way of an orderly process for fraud risk management.
How do you stack up against these four criteria? Do you lead the fight against fraud by your words and your actions? Does your team see it and follow the example you set every day?
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.”