As corporate lawyer, you occasionally advise client on their anti-fraud strategies. What does that typically involve?

When advising clients, my main role is to advise them on fraud prevention – my litigation colleagues specialise in fraud investigations. I try to help companies devise a fraud prevention policy that is good for the company’s purpose, meets market expectations from a governance perspective, and is something the company can live with day-to-day.

Where I can bring the most added value is analysing what is best for the client – there isn’t a “one size fits all” solution. A successful anti-fraud programme shouldn’t effectively close the company down, or hamper its ability to be inventive and entrepreneurial. While it is important to have an effective compliance programme in place, companies should not go “overboard” when implementing controls.

Depending on the size of the company, I may advise the legal or compliance department –  if they have one – or the chief financial officer, in some smaller companies.

In your opinion, what is the best way to achieve a successful fraud detection programme?

The success of any anti-fraud programme will depend, in part, on the company’s culture, and also on the commitment of the company’s directors and senior officers.

In a top-down approach to managing an internal compliance programme, senior executives and managers should do the following:

• They should set the “tone from the top”
• They should adopt a clear code of conduct
• They should carry out a comprehensive assessment of risks, to identify where fraud or misconduct might occur. They should implement a plan to address any risks.

It’s also important that any fraud prevention programme should be visible to all the employees. Companies should therefore also:

• Provide mechanisms for fraud disclosure – such as whistle blowing hotlines
• Establish comprehensive protocols for internal investigations
• Provide quick, decisive, visible and consistent enforcement
• Provide clarity, in terms of employee accountability for fraud

It also helps if companies can leverage technology to assist with the detection of fraud. They should also perform proper due diligence on employee hires or promotions.

If companies introduce all of these measures, will they be able to eliminate fraud in their organisation?

No – no system or procedure can entirely eliminate fraud. But an appropriate system can limit situations when it can occur.

The worst thing a company can do in relation to fraud prevention is to develop a programme, but then not implement it. If you create a programme, you create an expectation that you’re dealing with the issue. If it then turns out that you are not, your company may be more exposed to a greater level of liability than otherwise would have been the case.