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Want to avoid scandals? Build a compliance program

Nicholas Mineo (nmineo@coreconsultancyllc.com) and Paul Moskal (pmoskal@coreconsultancyllc.com) are Co-Directors of CORE Consultancy LLC, in Buffalo, New York, USA.

Everything seems perfect. You own a successful company. You have taken great pains to hire competent managers and draft thoughtful policies. You are accessible to your employees; your company culture is strong, and recruits are eager to join your team. Your company, profitable and widely admired, is ready for years of prolonged and sustained growth.

Then it happens…

The phone rings and you learn your company now faces a government subpoena requiring the production of sensitive documents, or the local media is asking for a statement on a forthcoming scandalous story. Perhaps, human resources (HR) informs you an employee has come forward with serious and credible allegations against a leading executive.

In a moment’s notice, the company you’ve worked so hard to build is mired in scandal. Now, thoughts of being named one of the best employers in the area shift to worries about loss of business, public condemnation, reputational damage, fines, diminished employee morale, and employee flight. In the face of public scandal, worst-case scenarios suddenly become very real and possible.

Unfortunately, you have joined a seemingly endless parade of companies facing a painful, embarrassing, and costly corporate scandal. Regardless of the scandal’s source (e.g., a rogue employee, a third party), your good intentions and policies failed to detect or prevent the unthinkable from happening. In today’s business world, it is evident that if an organization lacks a culture supporting the rule of law and ethical decision-making, then it is almost assuredly on a path to eventual scandal. When scandal breaks, clients, the government, and public opinion will hold your organization liable for the culture and behavior.

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