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Bad leaders? Increased fraud

Hidden consequences of poor leadership

Do you want to make sure you have more fraud in your organization? Then hire bad leaders and poorly train them with outdated methods. Here’s how to avoid employee disengagement by changing attitudes and behaviors.

Rebecca is frustrated. She’s been a fraud examiner and internal auditor in a large corporation for four years. Rebecca enjoys every aspect of the evidence hunt, including working with sources, response teams and counsel; interviews; analyzing documents; data analysis and digital forensics. She abhors only one part of her job: collaborating with her boss, Jennifer, the vice president of accounting. Jennifer can be — alternatively — overcautious, obstinate, dismissive and overbearing. Rebecca feels that Jennifer often inappropriately puts the brakes on Rebecca’s fraud examinations, which often wastes her time and occasionally allows fraud to accelerate unabated. Rebecca is losing interest and creeping toward job disengagement. The corporation is losing out because of Jennifer’s poor leadership skills.

Forget about lost job productivity because of solar eclipse day, Super Bowl Monday, March Madness, Black Friday or the World Cup. Worry instead about the daily revenue leakage from disengagement and lost productivity that’s costing U.S. companies $350 billion annually in lost revenue because of ongoing ineffective leadership (See “2018 Gallup State of the American Workplace Report.”)

We’ve all worked for people with differing leadership styles: from the autocrat (“do it my way”) or the bureaucrat (“this is the policy”) to the laissez-faire proponent (“let them do it”) and every other style in between. Regardless of the dominant leadership style, ineffective leaders — those who are abusive or incompetent on several levels — are a financial and intellectual capital drain for companies everywhere. That can translate into botched fraud examinations and more opportunities to commit fraud.

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