Though I could believe it, I was still shocked when I spoke recently to a group of over 200 CEOs, not one of whom raised his or her hand when I asked who had a fraud policy. Disheartening still was that most people didn’t even know what I meant when I asked the question.
What is a Fraud Policy?
A fraud policy is similar to a mission statement and core values. Most companies have a mission statement. It says something to the effect of why the company exists and what it was formed to do at the highest level. Core values might further flesh out those elements of a company’s attitude and approach that are indispensable to its running successfully year after year. They might deal with product quality, customer service, community interdependence and so forth.
If you go into any Whole Foods, for instance, you’ll see the mission statement and core values on huge signs near the checkout area at the front of the store. Many companies even spend tens of thousands of dollars (or much more) hiring consultants to perfectly craft their mission and values.
Similarly, a fraud policy clearly states – for all to see – the approach a company takes towards those who commit fraud, steal, lie or cheat.
For instance, a fraud policy could state something like, “If you steal, you will be prosecuted to the fullest extent of the law.”
Why Don’t Companies Create Fraud Policies?
With all that time and energy invested in mission statements and core values, why don’t companies take ten extra minutes to tack on a Fraud Policy and then display that at the front of their stores, websites, factories and warehouses?
In short, I think they don’t know they should. So let me be the first to tell you that you should. Every single company should have a fraud policy.
As you can see, it doesn’t take long to come up with a Fraud Policy, especially since it doesn’t need to be perfectly crafted and expertly displayed. Crudely stating, “If you steal, we will throw your butt in jail so fast it knocks the shoes off your next of kin,” would be sufficient. The point is to share the very direct fact that no one will get away with fraud or theft, and if people do steal from you they will be caught and they will be prosecuted to the fullest extent of the law.
Let’s Make a Plan
So, this week, I want you to take the time to make an official fraud policy. Display it, own it and love it.
In addition to putting that on your to-do list, we’re going to put some things on The Turnaround Authority To-Do List. To honor Fraud Prevention Month, we’re going to address numerous issues about fraud throughout the month of March, and even continue well into April since preventing fraud is a year-round process.
In coming posts I will discuss the importance of prosecuting perpetrators of fraud and the values of an informal fraud policy. I will also share a dozen tips and ways that you can prevent fraud, things that you should watch out for, and much more.