Fraud is widely recognised as a serious problem in the country and has significantly affected corporate entities and individuals as well. It has undermined good governance in both political institutions and companies.
A number of initiatives have been initiated to fight the vice. At East African Breweries Ltd (EABL), we have come to the conclusion that an important part of this process is an educated populace, armed with tools to better protect themselves.
The number of high-profile cases that are under investigation or those who have been hauled before the courts because of fraud and graft in the country speak to the ease with which white-collar criminals often perpetuate their crimes and go back into it despite prosecution and conviction.
The rate of recidivism or repeat offences is alarming for these types of crimes. It is appalling to think of the number of innocent people affected.
Often, the culprits are arrested and taken to court to face justice, but because the investigations are complicated and can take years, millions of shillings are lost before criminals are brought to justice.
A few days ago, EABL conducted its annual Staff Compliance and Ethics Conference during which panelists were invited to discuss, amongst others, fraud and ways of eliminating it in companies.
Generally, most companies choose not to brood over the issue, but there was a lot to learn from the conference.
We invited Olympic gold medallist, Wilfred Bungei, as the guest speaker. It may be a little difficult to link the workplace with sports or the 800m race in which Bungei excelled as a runner, but by the time Bungei was finishing his talk, the commonalities between sports and the workplace were open for all to see.
Bungei won the 800-metre gold medal at the 2008 Olympics in Beijing. He also won the 800-metres title at the World Indoor Championships in Moscow in 2006, defeating big names like Mbulaeni Mulaudzi and Olympic Champion Yuriy Borzakovskiy.
Bungei said cheating or employing fraudulent means for self-satisfaction at the workplace is like doping in sports: It denies the rightful winner his or her place and urged everyone present to unite and fight the vice.
In the corporate world, where many people are closely connected through various ways, it becomes easy for fraud to occur.
Vigilance must be observed whether one is dealing with a neighbour or fellow parishioner. Former US President, Ronald Reagan wisely warned: "Trust, but verify."
Our Staff Ethics and Compliance conference marketed this tool robustly through a skit that was performed by employees and the discussion by panellists that followed.
The idea was not only to benefit our company, but our hope was to inculcate a culture of openness and better way of doing business even in other companies and the society at large.
No research has been done to ascertain how much companies and individuals lose to fraud, but if such studies were to be conducted, the findings would be unsettling.
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In truth, many firms are overlooking the problem or underestimating their vulnerability to fraud.
The risk of fraud is real – and it is important that they take steps to prevent, detect, and respond to fraud.
The financial loss to organisations is upsetting, of course. But, as was noted by panellists during the discussion, staff morale and the management's confidence in their charges can also take a hit.
The reputation, value, and public and client trust of the firms that maybe involved also suffer.
Companies can raise awareness by ensuring their staff knows what constitutes fraud – and what to do if it occurs.
In fact, employee tips are the greatest source of fraud detection.
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