My first career was that of public accountant. Every audit began with “reconnaissance day” when members of the audit team investigated what was really going on inside the company. This detective work entailed talking to those people one did not normally talk to in the normal course of the audit. There was the janitor; the people who worked in the cafeteria; the person responsible for the building and the grounds; and maybe a truck driver.
Each encounter was styled as an invitation “to chat.” Casually we would inquire as to how things were going, what was new, what changes had occurred recently, were there departmental restructurings, why the cafeteria had been moved to a new building, what happened to the CEO’s old Mercedes, when did he get a new one, what was in all the stacked crates of inventory, why there were now two security guards, and so on. Our intent was to sniff out anything that seemed vaguely different or out of the ordinary. We would chat and question, seemingly nonchalantly, with no apparent agenda, just getting the feel of the place and what was going on at the grassroots level.
Come four o’clock in the afternoon, we would gather in an office and share the spoils of the day. My, what a lot we had learned without opening a book or looking at one canceled check. We had learned about hirings and firings, misappropriated money, scandals, new homes purchased by the senior management team, court cases in progress, inventory being stolen, overseas bank accounts, office affairs and the true picture as to whether the company was doing well. The “low-level” employees knew it all. They were eager to talk about what they observed. The audit after that was a piece of cake. All one needed was the evidence, and it was always there hidden in plain sight.
I gained many insights from that reconnaissance day, a significant one being that if a fraud or any form of corruption is in process, everyone knows about it even if, or when, they feign ignorance. There are no secrets in organizations. I also learned that fraud and corruption require collusion, which is why division of duties is the backbone of internal controls. Rarely is just one person involved. Fraud and corruption require a network of multiple players, and it is not always just senior managers who are the bad guys. Often, many employees are complicit. And so, my hunt for courage began.
I have had many careers in different countries and across a variety of industries. And over those years my search for courage gained greater urgency. I kept wanting to understand what causes people to succumb to corruption and why temptation appears closer than ever and harder to resist. Three years ago, I decided to commit to investigating courage in earnest, which took me through huge amounts of research, including partnering with the Center for Ethics in Society at Saint Anselm College in Manchester. There I was allowed to survey their business ethics students. I also interviewed over 20 CEOs and senior executives from both the for-profit and nonprofit sectors.
Has Corruption Increased?
According to the recent explosion of literature on white collar crime, some claim that its increase began after 9/11, others state that the lack of consequences for the financial sector in the aftermath of the financial crisis of 2008 was the major turning point, and yet another group assert that the major inflection point was in 2019/2020 when America became awash with COVID funds. Many financial and media analysts claim that the foundation for the escalation in corruption was laid toward the end of the 20th century, and that we are just seeing it play out on steroids now.
Stories of malfeasance dominate the daily headlines. The Sen. Robert Menendez conflict of interest scandal, the brazen and defiant Sam Bankman-Fried cryptocurrency fraud, the ignominious fall of the arrogant bankers of Silicon Valley Bank, and the fiddling of the books by Bed, Bath & Beyond represent just a few of the more recent egregious examples.
What is most disheartening is not only corruption’s pervasiveness, but that its corrosive networks extend far beyond those in power to the ordinary citizen and the everyday employee. Everyone is complicit. It is hard to find a large public or private sector organization that is not in some way tarnished with the unscrupulous brush.
Sadly, added to this dismal picture, award-winning journalist, Jesse Eisinger has written a powerful book named The Chickenshit Club. In his book, he explains in detail how the Department of Justice prosecutors are in league with Wall Street and big corporations hoping to land lucrative jobs after their stint in government. He describes their minimal desire to pursue white collar criminals and their lack of skill to unravel complex cases. Fining the company (the shareholders) and wagging a warning finger at the executives is easier to do and does not break unwritten ties. Conflicts of interest are rife, and as a result most crimes are never prosecuted.
Courage: Our Noble Calling
In 1952, the well-known 20th century philosopher and theologian Paul Tillich wrote “The Courage to Be.” Courage, Tillich explains, is part of existence. Acting courageously affirms who we are as human beings. This is the affirmation of our full humanity and makes love of others possible. Self-affirmation and love, writes Tillich, are interdependent.
If we wish to live a full and happy life, we are called to consciously develop our capacity for courage. Tillich acknowledges that being courageous is not easy. It takes great courage to pursue our principles and not concern ourselves with public disfavor. It takes courage to refuse the attraction of dogmatisms, to be open to exposing our ideas to challenges and critique. And it takes great courage to always live out of the best of our humanity.
Tillich points out that acting courageously demands sacrifices that may include our own happiness and even our existence. Courage always includes risk. Most often our fearful self wants to escape the pain of hurting and being hurt. Courage helps us transcend these anxieties and fears.
Courage is a strength of mind capable of conquering whatever threatens the attainment of the highest good, and therefore it is also inherently noble. We need good, courageous role models and leaders to help us step into our own courageous shoes.
Rather than discover courage I found that
brazen, complicit corruption is ubiquitous:
Since 2021, annual losses from white-collar
crimes have been in the range of $426 billion to $1.7 trillion.
Businesses lose as much as 6% of annual revenue to white-collar crimes committed by employees.
- It is estimated that 35% to 40% of all businesses are affected by criminal behavior.
- Executives make up 20% of crimes but they create by far the most damage.
- 54% of crimes are committed by people between 31 and 45 years of age.
- 49% of white-collar criminals have a university degree.
- Only 7% of all crimes are carried out by women.
- 80% to 90% of offenders are white people.
- Between 5% and 10% of employees participate in crimes. That means for every 100 of your employees, between 5 and 10 could be engaged in fraud or corruption.
Annabel Beerel, PhD, is an executive advisor-consultant, speaker and author. Her latest book is “Courage: The Heart of Leadership.” For more information, visit annabelbeerel.com.
