Eliminating company fraud and risk exposure with Skin in the Game incentive.

Recently posted in press articles were two top insurance carriers that had experienced internal theft from within their organization. On two separate occasions two managers were arrested allegedly for committing  “fraud’. Both managers came up with completely two different variations of fraud, but had managed to circumvent the internal controls within their organization in order to divert corporate funds for their personal gain.

How does such internal theft happen if there organizations had strong risk controls?RIM President, Linda Webb (aka The Fraud Dog) speaks on the importance of staying at ground level of the organization, and continually reviewing those internal controls. Every organization is vulnerable from within. Assuming your organization’s risk controls are beyond breach is something top executives cannot lend a blind eye to. In order to understand your risk controls you must constantly understand that every organization has internal vulnerability points, or what we call, “holes” in your corporate integrity. Businesses must continually “stay on their toes” and “shake the bushes” from within.

What has been “lost in translation” is that it should not just be top executives who are held accountable for strict risk controls, but everyone in the corporation itself at all levels.

It starts with your “corporate image.”  Risk controls should be a key integral part of your corporate image. We continually strive to bring new business into a corporation as the sole means for being profitable. We also stress the importance of great customer service, but fail to continually to look within our own inner walls in the service we provide to our employees. What happened to servicing our employees in order to strengthen our foundation? How did we lose site of our “best commodity” which is the employee. It makes no difference what product your company sells, if you do not take care of the person who has to sell the product.

You can have the “best race horse on the track”, but without a great jockey to guide that horse… you will never “win the race”.

Risk Control first starts with “Risk Integrity.” Risk Integrity starts with “risk incentive programs” within your organization. When unemployment went to 10%, employers continued to say to employees, “You are lucky to have a job”. What happened to the employer saying,  “How lucky am I, to have such a great employee.”  Your corporate image starts with how you value your employee. When top executive show value to their employees, then the employee feels valued and in turn has pride for the organization. This is the foundation of a “Risk Incentive Program.”

Internal theft is something that breeds from within the organization.  Employees who do not feel any ownership towards the employer can easily steal from the employer without little or no emotional feeling.

There are three types of people of who commit internal theft.

1. The first type of employee is the common criminal, who would steal from anyone.

For this person stealing is a learned behavior and a standard way of living. Strong pre-employment background checks as part of your risk controls can typically lessen your chances for allowing the “common criminal” in your corporate ranks. If you have a strong “risk integrity program” this type of person will not want to stay at your organization.

2. The second type of person to commit fraud from your organization is the “opportunist”.

This type of person is someone who may not think about stealing, but found such a wide gaping hole in your risk controls, that it was like “found money” in their eyes. Poor risk controls can tempt anyone with tough family pressures. A strong risk integrity program would stop this type of “opportunist” crime. Offering, “risk incentives” to report these holes within your ranks, will provide an open environment, and everyone in your organization would be “watching” to make your company better.

3. The third type of person to commit fraud from within your organization is the person who thinks that the corporation no longer appreciates them.

Employee discontent is something that an organization cannot lose site of. Employees must feel “pride” for where they work. When an employee has pride, they will not steal from the organization. Your corporate image must continually find a way to incorporate every one employee’s pride, like a “beckon of light”.

The most profitable and strongest corporations in America are those corporations who give back to their employees first and foremost. This in turn breeds “faithfulness” and a sense of belonging. It is important that everyone in the organization carries those same corporate images throughout the whole organization.

We call that “having skin in the game.”

RIM understands the importance of getting everyone within the organization involved, excited and proud. Incorporating a “risk incentive program” within your corporation gets everyone involved in finding the “holes” or risk points.

Everyone in the organization could (and should) play a key integral part in your risk management by first implementing a “strong” risk incentive program”. Everyone in your organization can feel like they are a part of the team, when they have “skin-in-the-game”.

Ownership does not mean “equity”, it just means, “sharing”.

When your corporate image incorporates “risk integrity” with a risk incentive program, then everyone within your ranks will help find risk, report risk, and stop risk.

Linda Webb and her RIM Team are ready to show you how “Skin in the game” brings risk integrity back into your corporation.

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