Catherine Lofland, CPA
ACFE Research Specialist
Someone once told me about a girl who was a cashier at a large grocery store chain. On her 15-minute break, she helped herself to a snack from the bulk bins. Although each item from the bulk bins is priced differently and therefore charged individually, she assembled a quick mix of almonds, cashews, dried cranberries and goji berries in one bag. When she paid for the bag, she checked herself out and used the code for almonds, the cheapest item in the mix. As she left the store after her shift, she was arrested and charged with theft.
The cashier probably thought mischarging a few goji berries (which can cost over $14/lb) was no big deal. Her employer clearly disagreed.
While some might argue involving the police was an unnecessarily harsh reaction to such a petty crime, it is critical for a company’s employees to exhibit an unwavering commitment to high ethical standards. After all, if this employee had gotten away with mischarging these items, what might she steal in the future? Could you really describe this employee as “ethical?”
For many people, ethics is an esoteric concept. Philosopher Philip Wheelwright defines ethics as “that branch of philosophy which is the systematic study of reflective choice, of the standards of right and wrong by which it is to be guided, and of the goods toward which it may ultimately be directed.” While most people have a general idea of what ethics is, the concept does not receive enough discussion, analysis and attention. Many leaders avoid the topic because it is not cut-and-dry. It is difficult to teach and understand. However, I think everyone recognizes the importance of an ethical workplace culture.
If you’ve been looking for a way to start the conversation about ethics at your organization and implement a formal ethics program, or tweak an existing one, I encourage you to check out one of our newest online self-study courses, How to Build an Effective Ethics Program. This course teaches you how to perform an ethics audit, it identifies the essential components of an ethics policy and it provides guidance on how to conduct engaging ethics training. Most importantly, however, it teaches you how to integrate an ethics policy into the operations and culture of your organization.
According to the 2012 Kroll Advisory Solutions’ Global Fraud Report, more than 66 percent of corporate frauds are committed by insiders. Although conducting background checks and speaking with references are good practices for vetting job seekers, not all unethical people have an incriminating past. The ACFE reports in its 2012 Report to the Nations on Occupational Fraud and Abuse that 87 percent of fraudsters had no criminal background prior to the offense and had never been punished or terminated by an employer.
For an ethics program to be successful, an organization must support an ethical culture. Individual character traits might predispose a person to ethical or unethical behavior, but the cultural context in the organization also has a powerful influence on the employees’ actions. Being immersed in an ethical culture might make someone think twice about stealing a few goji berries… or embezzling a few thousand dollars.