What to do when your best performing manager is a fraudster.
Imagine the scene: the company's best performing manager has stolen £20,000 from the business. It's corporate theft but also deeply personal.
It was you who singled him out for promotion, considerable trust has been placed in him. Even previous financial irregularities, like the fact that his car only ever seems to do 5 mpg, have been overlooked because he has been bringing in highly profitable business.
The finance director discovered the fraud - a simple theft involving collusion with a supplier and a customer. He believes the facts are easy to prove and is furious because adverse publicity is the last thing the company needs at the moment.
What do you do? Fire the manager on the spot or suspend him? Call the police? Talk to the company lawyer, or your human resources advisers?
What will you say to the staff and how can you face other board members or shareholders? Who will trust your judgment now?
Follow John F Kennedy's dictum, 'don't get mad, get even'. Your resolve hardens when the manager is confronted and says: 'Look, I'll make it easier for you. If you give me £10,000 and a good reference, I'll not say a word to anyone.'
Consult with lawyers, human resources advisers. Suspend the manager immediately. Tell staff that you cannot explain why at this point but will do so as soon as possible. Notify the police and enlist their support in proving the facts, particularly regarding the other parties involved. Notify the chairman or chief executive of the companies in which those parties work. Conduct a thorough review of financial controls and systems and introduce any additional procedures. Tighten up the referencing process for new employees.
Patrick Dunne is head of 3i's independent directors' programme, 0171 928 3131.
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