Fraudulent or corrupt acts may occur in your organisation right now. They may include a wide range of behaviors such as breach of trust, employee misconduct, fraudulent statements, assets misappropriation, criminal offence, and so on. The consequences of those fraudulent activities for organizations can go well beyond the direct financial loss to include regulatory investigations and media embarrassment leading to further damage to reputation, loss of staff’s motivation, loss of customers and ultimately destruction of shareholder value. Continue Reading…
Archives For Corporate Governance
Back in 2008, in the wake of the subprime debacle as the financial crisis was affecting every corners of the world economy, equity-based compensation packages of senior executives and traders in financial institutions came under the scrutiny as one possible culprits for the excessive risk-taking behaviors that eventually led to the financial crisis.
IRONICALLY, equity-based compensation systems and in particular Stock Options were initially devised as a form of risk control to resolve the conflict of interests inherent in the agency problem in organizations Continue Reading…
Whenever a large and well-know organization run into troubles, we often hear in the news and read in the investigations reports that there is a “problem” with Corporate Governance, or that more precisely the corporate governance system was somehow “WEAK” in the organization under scrutiny allowing greed and self-interests to go on unrestrained. The suggestion is often that more rules and controls are “needed to prevent this from happening again”. Continue Reading…
When someone does something unethical or even criminal to others, there is a natural tendency to blame the character of that individual and to take comfort in the view that he must just be a “bad apple”. However this would ignore that human behavior is also influenced by powerful environmental/contextual forces. Continue Reading…
Risk Management Demystified 