The massive theft and accounting frauds of Enron ($62b), WorldCom ($11b) & Tyco ($600m), led to global repercussions. Many companies are still being investigated for backdating shares and accounting irregularities. Enron was the 7th largest company nationwide and it’s demise caused the collapse of it’s accounting firm, Arthur Andersen. In 2002, this led to the Sarbanes Oxley Act, designed to regulate corporate governance; yet most companies today are still poorly informed about how to screen their executives and often rely on personal references & industry reputation. The CFO of Veritas a few years ago claimed a degree he did not have and when the news broke, the company lost $20 million on the stock markets in one day. Still, clients are often surprised to hear that 20% of executives do not check out well, may be involved in fraud and kickbacks, or have undisclosed involvement in other companies. On a smaller scale, but still damaging, may be a history of sexual harassment or litigious behavior. Many issues exist in the executive arena; yet so much reliance is placed on an executive’s general reputation.

How are you dealing with employees who are actively making threats in the workplace? The warning signs are often missed or ignored; frequently we hear: “Oh that’s just John venting steam again”, he’ll be okay in a few minutes. Yet thousands of these instances occur daily in the workplace. Most of us recognize that domestic violence is another serious issue which may sadly become everyone’s problem, when a spouse shows up at work one day with weapons & the intention to kill anyone who gets in their way.

What needs to be done? Start with your main offices, then examine the company’s global implementation procedures. Secure your company’s Intellectual Property, then secure both perimeter and desktop environments, applying multiple lines of defense. Employ PKI (Public Key Infrastructure) to encrypt and restrict access to sensitive data and communications. At the senior executive level, your team needs to be unified around corporate security goals. Establish a Crisis Management Team including C level, Legal, HR, & Security departments. Federal & State laws hold management directly responsible for providing a safe & secure workplace. Implement Best Practices in the areas of pre-employment screening and physical security procedures, these techniques are an excellent start to preventing crime. Are you utilizing basic physical security parameters & techniques to secure all products (bar codes, locked cages, access control systems, etc) and regularly updating your facility security plans? Are you screening all employees, temporary staff, executives & contractors? Most companies are unable to identify their onsite contractors; even those with access to highly sensitive IP, they are never screened because HR is unaware that they exist. Become knowledgeable about the warning signs of workplace violence and threats (there are always, always warning signs). Threat evaluation should be done by professionals who can diffuse the situation before it becomes violent. Check that your employees recognize threats & are trained to report them too--everyone will be safer.

Typically problem employees, frivolous lawsuits and crimes are often considered part of the usual “cost of doing business”, yet smart companies proactively reduce these risks globally.

Know your employees, and if you operate globally, make sure you know your trading partners. Don’t just hope for the best. Proactively deploy security policies & protocols throughout all facilities globally; even basic steps make a big difference in securing your workforce.

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