Measure and monitor your fraud risk management program success

Susan is head of investigations for a mid-sized, global manufacturing organization with sales and manufacturing facilities in the U.S., Latin America and Europe. The chief compliance officer (CCO) and chief financial officer (CFO) have asked Susan to make a short, end-of-year presentation to the board of directors summarizing the company’s fraud risk management program (FRMP) and some recent investments the company has made into improving its culture of compliance and anti-fraud controls. Managing a global team of eight professionals — all CFEs, of course — Susan recently invested in new data analytics training and technologies with the intent to improve both preventive and detective capabilities around fraud, corruption, policy violations, errors and abuses.

The company’s board of directors is comprised of experienced business professionals with a mix of finance, business operations, engineering and legal knowledge. They’re known for asking tough questions that demand data-driven metrics, as opposed to “gut-feeling” inclinations. While Susan’s investigative team reports to the legal department, she also knows that she must coordinate with internal audit and ensure that she appeases the heads of various departments, such as finance, information technology, sales and operations, to gain their support. While everyone in the organization is aligned to the company’s goals and mission set forth by the CEO and the board, generally speaking, legal and compliance professionals in the business often take on risk management functions of keeping “the business out of trouble” so it can execute on its mission. On the flip side, staff dedicated to finance, operations and business growth have a different perspective in meeting the company’s objectives. Their focus is often around “making the business better.” Better efficiencies, better processes, better sales, better profits, and so forth.

Susan knows that her presentation to the board, which includes a good mix of risk and business-minded personnel, needs to balance both messages around making the business better and keeping the business out of trouble. With careful preparation, Susan hits it out of the park with her presentation, impressing the board and providing them a better understanding of the full impact and capabilities of the company’s FRM.

The example above is fictional, but if part of your job is implementing new technology and innovations to prevent and detect fraud, you might have encountered a similar situation with your company or a client. Or, perhaps you will in the future.

When presenting to the board or upper management, it’s important to keep their frame of mind and business objectives front and center if you plan to win them over. Dollar savings means nothing to a general counsel or chief compliance officer when the result is litigation or violation of the law. Alternatively, the CFO isn’t going to be compelled by a message that’s solely risk or regulatory-based without a consideration of return on investment or cost savings.