This post is a twin of my last one on Teaching Ethics in Management and Accounting because they originated in my reading of two related articles on fraud by Seb Murray (Financial Times, 13 June 2022). As the post became too unwieldy, I decided that it made better sense to split it into two.
This post also takes off from a passing reference to Donald Cressey in another recent post on Strategic Risk in Banking. Another post on Fraud, Terrorism, and Bathtub, had mentioned how those who want to commit fraud learn the loopholes over a period of time. Those loopholes provide the opportunity for fraud as discussed below. The discerning reader may also find in this post a resonance of the determining factors mentioned in yet another post on Why People Wore Masks. While wearing a mask is an act of compliance with a regulation, committing a crime is deviant behaviour, essentially constituting noncompliance with socially and culturally accepted norms, and/or in defiance of legal or regulatory sanctions. Continue reading “Why people commit fraud”
This Holmes was the subject of many investigations and a trial that ended in conviction. She was not just complicit. She was the perpetrator. If the DOB (Directors on Board) did not bark or howl, they were well taken care of. Even if they whined, she charmed her way through. In any case, they seemed keen to add a new generation tech firm to an already impressive list of credentials. They were victims of the promise or illusion of mentoring the next Bill Gates or Steve Jobs.
Such a bland assessment would have been kosher for most ordinary Boards. But we have here the likes of George Shultz (1920-2021), former Secretary of State, and also of labour and treasury, best known as the man who ended the cold war. If Shultz was not enough, we have Henry Kissinger (b. 1923), former secretary of state, and William Perry (b. 1927), former secretary of defence. All of them were then, or are now, in their 90s. The Holmes-Theranos affair offers interesting lessons for good corporate governance. Continue reading “Holmes and the Theranos Affair”