I want to dedicate this to every female entrepreneur that has experienced a toxic degree of dishonesty or let’s call it what it is – fraud, in their business. Ok, so allow us to begin with what fraud is, “it is the wrongful or criminal deception intended to result in financial or personal gain.”
Now, that sounds very serious, and as a result of that, many entrepreneurs often downplay their experiences. I personally think as women we are even more prone to doing this. Perhaps it makes it easier?! The fact is if we really think about this, there is no big or small fraud. Fraud is inherently dishonest, and no degree determines an ethically acceptable degree.
In my line of work, I have dealt with matters involving dishonesty and fraud. These have ranged from employees creating invoices, appearing to be supplier of invoices, to pay monies into personal bank accounts. Not to mention fictitious casual workers or new employees. I have seen people misrepresenting skills or experience to get the work. Not to mention accountants who, often through creative bookkeeping, misappropriate thousands of Rands over a long period. Obviously one of the worst examples, especially from the perspective of the long and meticulous timing. Almost like the thief who watches you for months before breaking into your house when you are out – the only difference is this person may be sitting in the office next to you, for years.
Ok, let’s talk about corporate fraud, like running shadow operations unlawfully competing with your business. Obviously, from a governance perspective, any betrayal on this level involving a director – exasperates this even more. Personally, I also think this has the most significant impact on the soul of those affected and the business. Because boardrooms are the places where a deep sense of sharing happens, where dreams become goals, and some of the most innovative ideas are shared very intimately.
So, enough about the minefield that often fuels a deep sense of shame. What does surviving any or all of this mean?
Well, easier said than done on a human level – it is critical to separate the personal emotional response out of it as soon as possible and as far as possible.
Then a first step would be to assess the damage, remedy it or contain it as quickly as possible. Respectfully, transparently communicate the situation to your team and create a safe space for them is critical.
Then, be mindful of the fact that it is a reality that fraud highlights aspects where a system or process requires improvement. So, use the opportunity to identify those gaps and remedy them. With that being said, in an environment of transparent collaboration, monitoring and reporting – fraud becomes less likely. In a situation where power and authority to act are strategically separated, the atmosphere is harsh for a fraudster. However, even when systems and controls are in place, it can still happen, but the impact is usually much less. So, the silver lining on the dark cloud is an opportunity or need for improvement.
Importantly, the business needs to be stable to sustain the next steps.
Finally, once the damage has been quantified, the impact is contained and business stabilised. It is vital to seek advice on reporting the incident to the relevant authorities or to take legal steps. Doing this is not just about senselessly following a process, but is about illustrating your discontent and that your values are lived.
In conclusion, and unarguably the most important, like with any other crime, the victim often experiences a degree of shame. Naturally, this is not a pleasant realisation, but there is no logical, factual basis for it. In fact, in my experience, most entrepreneurs either decide to downplay their experiences of fraud or to hide it. For this reason, we will never really know how many entrepreneurs have shared this painful experience, and therefore robust solutions may be lost.
As female entrepreneurs our lessons towards continuous improvement leading to ultimate success and everything in between should definitely be the subject of more discussions. Sharing is one of the most powerful tools towards positive change.
This article was written and submitted by Nicolene Schoeman-Louw. Nicolene is a attorney, conveyancer, notary public and mediator. She is also a managing director at Schoeman Law Inc and a contributor for For Women in Law.