Which of the following was not discussed as a way to create a culture of honesty and integrity?

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The culture of your organization is unique and complex, and could be a significant driver of unethical behavior if left unchecked. Culture is established and defined by the Board of Directors and management, however, all employees make up the culture of an organization and multiple cultures exist within every organization. According to the Association of Certified Fraud Examiners (ACFE), a typical organization loses 5% of its revenue annually due to fraud. Occupational fraud, or fraud committed by an employee against the employer, can be directly impacted by the culture of the organization. Developing a culture of ethical behavior is imperative for effective risk mitigation, compliance, fraud prevention, and detection.

Characteristics of Healthy Culture

The Institute of Internal Auditors identified five characteristics of a healthy culture, which are listed below. A healthy culture, rather than a toxic one, can mitigate fraud risk and deter unethical or illegal behavior.  If your organization does not exhibit all of these characteristics, consider what changes can be made to shift your culture into the healthy category.

1. Ethical tone at the top
2. Clearly defined values
3. Teamwork and collaboration
4. Honesty and transparency
5. Ownership and accountability

Culture of Fraud Prevention

What action is your organization taking to prevent fraud? Many organizations have a zero tolerance for fraud, but it’s not enough to place posters in the office common areas. Fraud can never be eliminated entirely, and without planned, intentional actions to prevent fraud, the likelihood of successful fraud attempts may increase.  Below are some actions for your organization to consider to help deter fraud:

1. Establish an ethical tone at the top, which exhibits a commitment to honesty and integrity
2. Create clearly defined Code of Ethics and Conflict of Interest policies
3. Perform a fraud risk assessment to identify incentives, opportunities, and rationalizations
4. Implement effective controls to mitigate identified risks
5. Provide a safe mechanism for reporting violations, such as a whistleblower hotline

Do you need help assessing the impact of your organization’s culture as it relates to fraud prevention? P&N has a depth of resources to help prevent, investigate and analyze fraud perpetration. Contact us today to find out how we can assist.

Many managers think of ethics as a question of personal scruples, a confidential matter between individuals and their consciences. These executives are quick to describe any wrongdoing as an isolated incident, the work of a rogue employee. The thought that the company could bear any responsibility for an individual’s misdeeds never enters their minds. Ethics, after all, has nothing to do with management.

A version of this article appeared in the March–April 1994 issue of Harvard Business Review.

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HPuschmann

Preserve your integrity.

Many of us have to make decisions that define who we are and what we believe in. Most often, the choices we face may seem insignificant. But this doesn't mean that they're not important to us: even the smallest action can have an impact on our self-respect, our integrity, and, ultimately, our reputation.

In a world where headlines are often dominated by people who make the wrong choices, people who make the right ones can seem to be rare. However, it feels good to live and work with integrity and, when we become known for this highly valued trait, our lives and our careers can flourish.

In this article we'll examine what integrity is, and we'll see how we can develop it and preserve it by making the right choices in life.

What Is Integrity?

Integrity is a characteristic that many of us value in ourselves, and it's one we look for consistently in our leaders. But what does it really mean to have integrity?

The Random House Dictionary defines integrity as:

1. Adherence to moral and ethical principles; soundness of moral character; honesty.
2. The state of being whole, entire or undiminished.
3. A sound, unimpaired or perfect condition.

Although the definition is sound, it can be a bit more complex to define integrity in our everyday lives.

You could say that integrity is always doing the right thing, even when no one is looking, and even when the choice isn't easy. Or, you might see integrity as staying true to yourself and your word, even when you're faced with serious consequences for the choices that you're making.

Alternatively, look at the second and third of these definitions. These were likely meant for structures, such as the integrity of a building. But we can just as easily apply this definition to ourselves. When we have integrity, we're whole and in perfect condition, and we're not compromised by awkward "inconsistencies."

When we live our lives with integrity, it means that we're always honest, and we let our actions speak for who we are and what we believe in. Integrity is a choice we make, and it's a choice we must keep making, every moment of our lives.

Why Is Integrity Important?

There are several reasons why integrity is so important.

First, living a life of integrity means that we never have to spend time or energy questioning ourselves. When we listen to our hearts and do the right thing, life becomes simple. Our life, and our actions, are open for everyone to see, and we don't have to worry about hiding anything.

When we have integrity, we gain the trust of our leaders, our colleagues and our team. We're dependable, and, when we hold ourselves accountable for our actions, we become role models for others to follow.

All of this, in turn, directly impacts our success in life. People who live and work with integrity are more likely to be considered for promotions. Why? Because integrity is a hallmark of ethical leadership – organizations want leaders that they can trust, and when you demonstrate integrity, you show everyone you can be trusted.

How to Develop and Preserve Integrity

Your integrity is what determines your reputation, and, just as this proverb states, all it can take is a single bad choice to destroy a lifetime's worth of integrity.

So, how can you work on developing and preserving your own integrity?

Step 1: Define Your Values

You can't live by values if you don't know what you truly believe in. So, start by defining your core values. These are the values that, no matter what the consequence, you're not going to compromise on.

Step 2: Analyze Every Choice You Make

Often, people cut corners or make bad choices when they think no one is watching. Having integrity means that, no matter what, you make the right choice – especially when no one is watching!

You'll usually know what's right and wrong, although sometimes you might need some quiet time to figure it out. If you're not sure what the right choice is, ask yourself these two questions:

1. "If my choice was printed on the front page of the newspaper for everyone to see, would I feel OK about it?"
2. "If I make this choice, will I feel OK with myself afterward?"

Remember, honesty and integrity aren't values that you should live by when it's convenient; they're values that you should live by all the time. This includes the big choices and the little choices – the choices everyone sees, and the choices that no one sees.

Step 3: Encourage Integrity

People with integrity often have the same characteristics: they're humble, they have a strong sense of self, they have high self-esteem, and they're self-confident. These characteristics are important, because, sometimes, you'll be under intense pressure from others to make the wrong choice.

Work on building and improving these characteristics within yourself, so that you have the strength and courage to do the right thing when the time comes. Build your self-confidence and self-esteem, and work on developing character. Spend time getting to know yourself, and what you believe in. Develop friendships and work relationships with others who demonstrate integrity, and who will support your decisions.

Further Tips:

• Learn how to be assertive, so that you can defend an ethical position from an adult point of view, without whining or being aggressive.
• Avoid white lies. They may seem harmless, but tiny lies are still lies. Always tell the truth.
• Learn to take responsibility for your actions. If you make a mistake, own up to it immediately and do whatever it takes to right the situation.
• Keep your word, and don't make promises that you know you can't keep.
• Keep in mind that in times of fear, disaster and chaos, the temptation is even greater to make a wrong choice. Use these opportunities to demonstrate your true character.
• Avoid seeming self-satisfied or priggish when you're acting with integrity: stay humble and down-to-earth, don't look for approval, and, where you sensibly can, try to let people save face.

Having integrity means that you live in accordance to your deepest values, you're honest with everyone, and you always keep your word.

Integrity is a highly valued trait, especially in leaders. When you live with integrity, you're more likely to be considered for important promotions and leadership positions.

To develop and protect your integrity, start by identifying your core values. These are the values that you refuse to compromise on, no matter what. Next, analyze every choice you make to ensure that you're doing the right thing.

Then, develop a culture of integrity around you, work on building your self-confidence and self-esteem, and develop relationships with others who live with integrity.