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Corporate Ethics: More Than Good Karma

How to set the bar high for employee behavior, and cultivate the kind of strong ethical culture that helps prevent internal fraud.

By Ed Rosenberg | Updated on November 08, 2016

In today’s world, no organization should expect to get away with bad behavior. Malfeasance can have significant impacts on an organization in areas such as loss of reputation, damage to employee morale, sanctions by regulators and other authoritative bodies, actions by law enforcement, and financial losses that affect the bottom line.

These are just a few of the significant business consequences that can blindside any organization operating with a weak ethical culture. And recently, public and stakeholder reactions to flagrant corporate scandals have amplified expectations that organizations will take a “no tolerance” attitude toward fraud.

How can a company reduce the chances that it will be impacted by fraud? Much attention has been paid to CEO fraud, also known as “impostor fraud,” in which criminals trick employees into sending them funds. Consistently following smart policies for double-checking fund transfer requests can help minimize the chances that a company will be victimized. However, preventing fraud that is intentionally perpetrated by internal employees—commonly called “occupational fraud”—is more complex, particularly if senior management is involved in the scheme.

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