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SuperConference panelists discuss the top corporate fraud schemes

In-house counsel examine how to identify corruption and maintain global policies and controls

During the breakout session titled “Top 10 Financial Shenanigans” on Day 1 of SuperConference, panelists discussed common instances of corruption that companies face on a global level, as well as ways in-house counsel and their auditing colleagues can spot and discourage bribery and fraud.

Ron Schwartz, partner at Deloitte Financial Advisory Services, moderated the panel, which featured Dawn Trimmel, internal audit director at McDonalds Corp., and Kristin Coleman, vice president, general counsel and corporate secretary, Brunswick Corp.

The discussion kicked off with an eye-opening statistic: Misappropriation of assets is the No. 1 fraud scheme affecting organizations, with the median loss for each scheme amounting to $135,000.

Panelists agreed that the more detached a business unit is from the corporate office, and the more autocratic the leader is that guides that unit, the more likely it is to be involved in some type of fraud.

Trimmel says training is paramount in discouraging violations of corporate ethics and compliance policies, particularly in areas of the world where employee turnover is high, such as China. “If the ethics policy isn’t communicated verbally, it just doesn’t sink in,” she says. 

Coleman says Brunswick has an effective anonymous hotline to encourage internal reports of fraud, and half of all financial fraud allegations the company receives are substantiated. Still, she says, “training, policies and controls aren’t enough to damper the urge to steal,” so lawyers must routinely communicate with their companies’ third-party vendors, assess their business relationships and pinpoint the risks their companies face around the world.

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