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Reporting Suspicion of Corporate Fraud: Damned If You Do, Damned If You Don’t!

The Ethical Dilemma: When Does Inaction Become Collusion?

One of the greatest challenges that individuals can face in their career is when they first suspect there is something occurring in a business that may cross an ethical, legal, or regulatory line. A colleage related his first experience of this, when one of his team came to him with the claim that someone had been “double dipping” on their expenses. After saying what he knew/suspected, the parting comment to my workmate was “well I’ve told you now, so that satisfies my responsibility… it’s your problem now”.

Whatever happened to the old saying “a problem shared is a problem halved”? In the case of a business hierarchy, it seems sometimes a problem escalated is a problem no more!

It didn’t take my friend much effort to check and satisfy himself the information appeared to be correct, and the unfortunate thing was the person involved was quite senior in the company. He was in a real quandary over what to do, and took some “off the record” advice from a lawyer friend. Without doubt, he was told, his legal responsibilities as a company officer were to report what he knew, but he was also told it was a matter of conscience as these things often create problems for the person reporting a suspected issue – whether it turns out to be correct or not.

In this case his lawyer friend was good enough to make contact with an appropriate person within the company and obtain reassurances the matter would be handled sensitively before he followed through with the information and from that points on, matters took their own course.

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