How To Scandal-Proof Your Business

The list of corporate scandals in America is tremendous. Every year dozens of companies hit the headlines because of financial impropriety. Crimes include things like embezzling funds, defrauding customers, and theft from shareholders. 

The question for businesses, therefore, is how to stop these scandals from emerging in the first place. But how can you scandal-proof a business? Is it really possible? 

How To Scandal-Proof Your Business

Be Clear That Crime Doesn’t Pay

Company cultures can sometimes go sour. Mismanagement and poor oversight often give workers the impression that they can take legal risks to move their company forward. This then generates a cavalier attitude among colleagues, reinforcing criminal behavior. 

The trick here is to continually remind employees that crime doesn’t pay. Tell employees that illegal business is too risky and eventually backfires. Make it clear that you will never support such practices. 

Make It Clear That There Is No Profit Opportunity

While illegally obtained business seems tempting at face value, it isn’t as profitable as many people think. In fact, it is generally loss-making in the long run. 

Many companies wind up charging bribes or paying officials overseas for preferential access. These practices seem to offer good value at face value, however, they generally lead to lower sales and performance in the long term. 

Point Out That Somebody Always Suffers

It’s also worth pointing out that somebody always suffers as a result of a scandal, either financially or professionally. Employees, for instance, who have nothing to do with the crime often find themselves going down with the ship. For instance, when investigators discovered that Wells Fargo had been behaving criminally, the company was fined and then lost more than $20 billion in market cap. It wasn’t the executives that suffered, but all of the employees associated with the company. Many struggled to get jobs and new firms, and some were made redundant in the wake of the investigations. 

Don’t Allow Favorites

Sometimes leaders can get into the habit of playing favorites with their staff. They allow some colleagues to get away with misdemeanors while disciplining others. These inconsistencies matter because they embolden the favorite. A colleague is much more likely to commit a crime if they know that their boss will turn a blind eye. 

We saw this during the MeToo movement. Boards turned a blind eye to senior executives accused of sexual harassment in the workplace. It was only later that they moved to eliminate bad practices and hired a criminal defense attorney

Recruit People With A Record Of Integrity

Maintaining integrity in the workplace can be a challenge. Leaders are under all kinds of pressure that encourages them to break the law. For this reason, you always need to look for people with a demonstrated track record of integrity. Find people who were willing to do the right thing in tough situations. The chances are that they will continue to do so in the future. 

Likewise, it is a good idea to get people to make difficult decisions as a group. Usually, the more people involved, the less likely it is that any individual will break the law. 

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