Tag: Director

Board of Directors Oversight

Under the U.S. Federal Sentencing Guidelines, in order to receive credit for having an effective compliance program, and thereby reduce the fines imposed on the organization, a Board of Directors must be “knowledgeable about the content and operation of the compliance and ethics program,” and must “exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program.”

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Big Data, Cross Border Matters, Third Party Issues, Regulatory Difficulties, and Compliance Problems are just some of the things Baker Tilly’s Global Forensic Investigations, Compliance, and Integrity Practice Tackle.

Our experience conducting fraud investigations, domestically and globally, allows us to advise our clients on measures they can take to prevent fraud from occurring and detect issues before they expand. Our clients look to us to design anti-fraud programs and controls, perform anti-bribery and anti-corruption compliance assessments, and perform proactive fraud examinations to identify possible red flags or indicators of fraudulent activity. Because of our collective skills and the depth and breadth of our experiences, we are also able to design and enhance compliance programs and serve as integrity monitors. 

Correcting deficiencies, addressing gaps in controls, and remediation of specific issues is important at the end of every investigation to prevent the same or similar frauds from recurring.

We address these important client needs at the end of our investigations and can assist with implementing remedial actions.

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COVID-19 – Fraud On The Rise is No Surprise!

Last week, the Association of Certified Fraud Examiners (” ACFE”) published the results of a survey taken by more than 1,800 anti-fraud professionals in late April and early May 2020, while we were deep into the Covid-19 crisis.  The findings, for the most part, are not surprising, but does reveal some disappointing information.  While I have not seen a raw copy of the survey, I was surprised the ACFE didn’t ask if the company’s fraud risk assessment was reviewed and modified accordingly.

In addition, the survey highlights trends in the overall level of fraud. Survey respondents provided information about their current observations and expected changes regarding ten (10) specific types of fraud.

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DOJ Revises its Guidance on the Evaluation of Corporate Compliance Programs

Without any fanfare, the U.S. Department of Justice Criminal Division has once again revised its Evaluation of Corporate Compliance Programs (“ECCP”).  The ECCP  remains  organized around three overarching questions that prosecutors ask when evaluating compliance programs, with some revisions, which are in bold text below:

Is the corporation’s compliance program well designed?
Is the program being applied earnestly and in good faith? In other words, is the program being implemented adequately resourced and empowered to function effectively?
Does the corporation’s compliance program work in practice?

While most of the document is identical to the 2019 Guidance, there are subtle and noticeable revisions.  The revisions appear to be designed to help provide additional clarity when answering the above three questions. 

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Tone from the top: Leadership’s challenge during a crisis

Leaders must find ways to engage with their people to motivate them, and this becomes increasingly important during uncertain or trying times. If done correctly, talking can be incredibly powerful. It can help relieve anxiety and help people find the strength they didn’t know was in them. Studies have shown that talking shuts down the brain’s fear center.

As Dr. Judson A. Brewer stated in a recent New York Times article, “Anxiety is a strange beast. As a psychiatrist, I have learned that anxiety and its close cousin, panic, are both born from fear.”

Fear and anxiety can be debilitating. Without proper communication in a crisis, it’s easy for people to spin and spread stories of fear, creating social contagion. To balance this tendency, in a crisis, leaders need to take their “tone from the top” to the next level.

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Board Member Composition: Participants, Passengers, and Prisoners?

As the organization’s ultimate decision-making body, the board of directors plays two critical roles: overseeing management on behalf of shareholders and other constituencies; and advising management, albeit with limited involvement in everyday company operations – nose in, hands off! The board should not attempt to run the operations of the organization; it should oversee how management runs the company.

I am amazed at how many members literally are not engaged, which reminded that one of the traits of an effective leader, or Pilot, is being a good team builder. But how can you build a good team if you don’t understand the players?  I’m not speaking about understanding their skills, I am speaking about understanding their level of engagement.  That amorphous concept most ignore.

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