A Chief Compliance Officer’s Opportunity to Capitalize on the Current Economic Downturn
The recession can fuel a rise in fraud and other crimes committed by employees, but it can also act as a catalyst for strengthening the systems in place for detecting and deterring corporate malfeasance. According to The Network’s Quarterly Corporate Fraud Index, the number of fraudulent-related incident reports across all industries nearly doubled to 21% in the first quarter of 2009 from 10.9% in the first quarter of 2006.
While it appears that the level of identified acts of fraud has risen, it is difficult to discern if there actually has been an increase in fraudulent acts. It may be that the level of fraud has remained consistent but more acts are being identified due to the rise in reporting activity. During times of economic stress, companies experience tightened budgets and a reduction in employees, resulting in high tension and low morale. As an employee’s level of apprehension toward the security of their own job increases, they are more apt to report incidents of unethical workplace activity that further threaten the stability of their organization.
But as with many situations of adversity, an opportunity presents itself. For a Chief Compliance Officer (CCO), this is an ideal circumstance to strengthen their company’s ethics and compliance programs.
But as with many situations of adversity, an opportunity presents itself. For a Chief Compliance Officer (CCO), this is an ideal circumstance to strengthen their company’s ethics and compliance programs.
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