Tuesday, May 29, 2012
WHISTLE BLOWING AND CORPORATE CRIME
Remember that 'whistleblowers' are considered as 'traitors' in many corporate and social environments as they are breaching the norms of the social group and destroying the cohesion and harmony and emotional contracting process of the social group they belong to (i.e. their own company group).
You see 'whistleblowing' is a 'hard' control, and it, alone, cannot deal with corporate crimes, very well. If you want to study why people commit corporate crimes and protect the company from such events you must look at the whole set of 'soft' issues, as well.
Hard controls are formal policies and procedures and how well or not they are designed and implemented. They relate to tangible things, usually well-defined, formalized and approved like organizational structure, assignment of authority and responsibility, corporate standards, policies and procedures, risk methodology, ethics code, compliance procedures, computerized systems, company books, registers, audit trail mechanisms, personnel controls like segregation of duties, taking vacation, job descriptions, confidentiality statements, etc.
These hard controls are implemented and used, in everyday business practice to carry out the activities of the organization, by various participants, i.e., people such as employees, managers, board members, customers, etc. These participants usually operate with their feelings, their beliefs, their trust and confidence, their motives, etc., collectively termed soft controls.
Soft controls are intangible things that have to do with behavioral aspects and social properties inherent in people (board members, executives, employees, etc.) and are utilized in applying hard controls in their daily business activities, and especially in business risk management, such as: tone at the top, understanding of the organization by the board, culture, structure of reporting relationships, morale, integrity and ethical values, operational philosophy, trust, Ethical climate, Empowerment, Corporate attitudes, Competences, Leadership, Employee motivation, Expectations, Openness and shared values, Information flow throughout the organization and emotional contracting.
I am afraid 'whistle blowing' will have to be complemented with improving all the other soft controls in order that corporate crimes are minimized at all.
John Kyriazoglou (email@example.com)
John Kyriazoglou, CICA, B.A (Hon-University of Toronto),
International IT and Management Consultant (with over 35 years of experience),
Editor-in-Chief for the Internal Controls Magazine, www.theiic.org
Author of several books:
(1) ‘IT Strategic and Operational Controls’, Publisher: www.itgovernance.co.uk
Direct Link: http://www.itgovernance.co.uk/products/3066
(2) ‘Addendum to IT Strategic & Operational Controls’
This book contains over 60 of IT audit programs and checklists in all IT audit areas.
Direct Link: www.itgovernance.co.uk/products/3143
(3) ‘Corporate Strategic and Operational Controls’, Publisher: www.theiic.org
with Dr. F. Nasuti and Dr. C. Kyriazoglou.
(4) ‘Implementing Management Controls for Small and Medium-Size Companies’
AMAZON Kindle Books:www.amazon.com
Direct Link: http://www.amazon.com/dp/B007Z1WTOM
(5) ‘Business Management Controls: A Guide’, Publisher: www.itgovernance.co.uk
Expected to be published within 2012
(6) ‘Pearls of Wisdom of the 7 Sages of Ancient Greece’
AMAZON Kindle Books:www.amazon.com
Direct Link: http://www.amazon.com/dp/B007YNPR8Q
SSRN Free Publications: http://ssrn.com/author=1315434