An unfortunate fact is that when employees carry out criminal activities, company executives and the entire brand might take the fall. This is because executives often sign off on paperwork they do not have time to read by placing trust in their employees. Little do they know, they might have applied their signature to fraudulent deals.

Harvard Business Review explains that these activities can cost millions of dollars, affect a company’s stock price and lead to distrust from customers and the general public. Authorities or the company might also hold executives financially liable for some of these damages, as was the case with the bank the HBR used to illustrate its point.

Put control measures in place

HBR found that control measures alone do not amount to much. Most companies facing white-collar scandals had these measures in place and they achieved very little. However, if the company comes under scrutiny, it is better to have a plan that failed than no plan at all.

Address the company culture

The number one contributing factor the HBR found was the effect of company culture on what some people felt they might get away with. Leaderships play a crucial role in shaping company cultures that detect and discourage wrongdoing early on. In these instances, you might have the opportunity to take action internally.

Explain the consequences

Many employees believe that their actions might affect them alone if discovered, but as illustrated above, executives often go down with them. Other employees’ jobs also end up at stake and customers might also face risks in one form or another. Explaining this to employees might help to impress upon them the need to remember the group and not just themselves.

Unfortunately, executives can do all these things and find themselves accused of crimes based on the paperwork they signed off on or circumstantial evidence. The bad news is there is no way to prevent this, but with the tips above, you might help to reduce the likelihood.