RISK MANAGEMENT CONSULTANCY

YOUR PARTNER IN AN UNCERTAIN WORLD

Case study: ethics and good governance ()

studies

The challenge

A Fortune 500 company wants to verify whether some of its vendors in an Asian country have any connection whatsoever with some of its key employees in the said country. Absolute discretion is of the essence since some of the vendors are para-public concerns.

Our approach

First of all, a complete check is done on each company as to who their shareholders, directors and key employees are. Also checked are their relationship with the client and, possibly, some of the client’s competitors. Also, the pattern of purchases by the companies from the client are verified as well as who are the individuals involved within the client’s organization and who is dealing with said vendors. Then some checks are done on the client’s employees (and their immediate families) as to their previous employment history, whether they have direct or indirect involvement in corporations (shareholders, directors, consultants) and whether said corporations, if any, are involved in a business related to this of our client. Last but not least, a discreet “lifestyle check” is conducted on said employees. Finally, a cross-check is conducted between the names of the vendors’s key employees against the client’s employees so as to attempt to identify any family relationship. While tedious, this process allowed for AGR to identify a few cases of unethical behaviour in definite contravention with the strict rules of compliance enforced by our client. Corrective measures were taken.

The impact

A few individuals were indeed connected to some of the vendors. Some without any proof of improper dealings who got off with warnings and reminders about the company’s Code of Ethics and Good Governance practices, some with clearly proven corrupt and collusive acts which brought about their dismissal for cause.

What the client valued

While the investigation was long due to the sheer number of individuals to check against a number of companies spread over the whole country, the client appreciated the fact that we kept him appraised of our progress on a strictly regular basis, exchanged questions and ideas with him throughout the duration of the assignment so as to verify certain finer issues and, very importantly, avoided to read misdeeds when there were none and thus saving a lot of time reaching the correct conclusions. Furthermore, at no time either the companies or the individuals investigated were made aware of this situation thus guaranteeing peace of mind to our client who could have faced union reactions and such.

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