Control Freak

Our friend Eric Krell at the Big Fat Finance blog has had some great writing lately on what he terms a rapidly emerging risk – the growing skills gap between jobs that U.S. companies need to fill and the skills of the available workforce. It’s a topic that’s drawn attention lately from some heavy hitters in talent issues, from the World Economic Forum to Manpower.

As Eric sums it up, “An annual Manpower survey finds that 52 percent of U.S. employers have trouble filling ‘mission-critical positions,’ up from 14 percent of U.S. employers last year. That’s represents more than a 300 percent increase in the number of companies having troubling finding qualified people.”

Some thoughts from the piece on how to fix things include employers building more robust entry-level training programs and engage in community partnerships to help fix a broken system of talent creation.

Another interesting approach? In a later blog post, Eric addresses the risk involved in businesses competing for talent in an increasingly limited skills pool. One way to be sure you’ve got a strong team is to keep the solid performers you’ve already got – and we have to say that Eric’s idea of “stay interviews” to encourage retention sounds downright inspired.

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We’ve been saying practically since the dark ages that you can’t legislate ethics. But organizations can foster an ethical culture, which is why this piece from Inside Counsel caught our eye this week.

In it, Brian Martin addresses the challenges nearly every organization faces when trying to develop policies and training programs to support ethical business practices. Chief among them? Integrity isn’t easy to teach, and ethical decisions aren’t the black and white sorts of things that fit well into training manuals.

Fortunately for all of us, he also shares some best practices for fostering an ethical corporate culture – first, by basing ethical codes on values core to the business and second – and crucially, by incorporating discussion of ethical dilemmas into training. As he shows, even hypothetical dilemmas can be seriously valuable in training, where varied functions can evaluate different options and address together the best choice in a particular circumstance.

The whole piece is worth a read, and we’d love to hear in the comments what your organization is doing (beyond lip service) to encourage ethical practices.

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We hope you’ll forgive us for sounding Dodd-Frank alarm bells two posts in a row, but CFO has an interesting piece up this week that’s too good to ignore.

In it, they explore the many reasons that CFOs might be fostering a corporate culture that unconsciously discourages frank (see what we did there?) dialogue about risk and controls. Alas, all that deference, hushed whispers, and cowed notions of respect that can typify relations with the C-suite . . . well, they don’t make for the most collaborative discussions when it’s time to talk risk turkey.

And as we’ve said, in an era when outside agencies will pay huge bounties to those willing to share concerns externally, it’s more important than ever to develop robust programs that encourage internal reporting – while issues can still be fixed.

The piece has some good ideas on what CFOs in particular can do to be more approachable, and they’re well worth the read. We’re not saying it’s time just yet to hand over the keys to the executive washroom, but their suggestions make a lot of sense.

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When the good people at Compliance Week asked us to share our thoughts on helping businesses account for (no pun intended) risks that come with the whistle-blower provisions of Dodd-Frank, we were only too happy to comply.

We’ve got a lot to say about the new regulations, which offer a hefty financial incentive for employees to go to authorities, rather than internal channels, with their concerns.

We’d love for you to check out the whole piece and let us know what you think in the comments.

With all the hullabaloo that’s gone on about the whistleblower provisions since the law passed, it’s easy to miss the good news: that companies with a firm handle on internal controls can make a great case for employees that concerns should remain internal. (And for regulators that We’ve Got This, Thanks).

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Careful readers may recall that we recently learned in our Control Freak survey series that businesses are generally aware that insider threats pose a big risk to their business – but that far too few businesses are monitoring for those risks as they should.

Well, we’ve got a real-life illustration of this one, courtesy of our friend Caleb at Going Concern.

It seems a Tennessee company, Flint Hydrostatics, just uncovered nearly $1.2 in losses – losses that appear to have come about when their former CFO (allegedly) wrote company checks to himself (and sometimes, a janitor, who’d cash them and leave them for the CFO).

For real? For all our talk about the increasing complexity involved in business . . . not to kick a company when they’re down, but controls that prevent this cutting-and-signing-a-check-to-oneself sort of thing? Not the least bit complex. Downright basic, to be honest.

So what gives? We get that progress takes time, and that things like Continuous Controls Monitoring – well, you may need a little explanation before you embrace it fully (in which case, stay tuned to this space…)

But this stuff is garden variety segregation of duties that’s been SOP since SOX (if not before).

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