Governance & Intelligence / 360 Risk Management & Scandal Proofing / 360 Risk Management & Scandal Proofing Advisory

It's an established fact that no company is immune to scandals. Prevention and minimizing the damage is the key to success. Based on the experiences of corporate scandals so far, it is a bitter truth that despite corporates being advised & consulted by top or 'gold standard' consultants, prevention of scandals is just an impossibility.?

Following are the 3 Strict Reasons for Corporate Scandals or failures.

  • Management/CXOs who are safekeepers of the company turning swindlers
  • Mismanagement or inability to comply with govt & corporate procedures
  • Lack of thorough consultants or excessive dependency on Gold Standard Consulting Service Providers

Root causes in above reasons of corporate scandals or failures?

  • Traditional Risk Audits & Assessments (Outdated or Template driven)
  • Forensic Accounting (resulting but in minimal cases)
  • FCPA, UKBA & Anti Bribery Compliances (Excellent SOPs & drafts, impractical implementation)
  • Compliance audits are governance or supply chain centric (Cannot yield desired results)
  • Risk management handled by CFO or general counsels. (Its strictly not their job)
  • 360 degree Corporate investigations (Nil or weak)

What are the best procedures to follow to safeguard a company from scandals?

It's important to understand the thin line of difference between Risk Proofing & Scandal Proofing. Though the line is thin, the effect can shake the pillars of a company and take away the freedom of corporate leaders.

Risk management can only help a company prevent from operational risks and ensure compliance on record. Risk management identifies and suppresses a problem. Scandal proofing eliminates the root cause of the problem.

Example: In Satyam's case, there were effective risk management procedures implemented every year. These risk management procedures resulted in establishing the performance of employees, equity performance, statutory & govt compliances. However, the chief was successful enough to manipulate the figures and records. Only when a top corporate investigated the valuation and deep financial records, the source of the scandal was found out. This doesn't mean that tax and other consultants were in collusion. It's just that the records submitted to all internal & external consultants were fabricated.

The key difference in result is: As per risk management results, the company has complied with the government & statutory procedures, has filed all necessary documents, paid taxes as per audited statements and everything looked clean. However, the detailed investigation established the fabrication of figures and facts at source.

About Our Corporate Scandal Proofing™ Advisory

Its not a company CFOs or general counsel or external consultants job to prevent your companies from scandals. It shall only invite problems. It takes herculean efforts from industry experts and surely not a process that can be drafted as 'Standards of Procedure to Scandal Proof a corporate.

It requires a detailed study, research & implementation by a group of industry experts, multiple assessments, deep investigations, troubleshooting and most importantly working closely with the management for longer time periods.

We advise corporates on corporate scandal proofing, subject to a detailed study of the corporate by various industry experts. Depending on the complexity we identify if there is a need for the corporate to avail corporate scandal proofing solution and recommend the same.

Our corporate scandal proofing™ advisory involves the following procedures & stages:

  1. Detailed Analysis & research about the corporate and its operations
  2. Advice on Scandal proofing procedures & compliances based on the corporate profile.


Major Reasons of Corporate Scandals & Failures: Internal Factors
The root cause of the problem isn’t ineffective regulations and compliance systems, however, It’s weak leadership and flawed corporate culture.

  1. Internal Syndicates: When Founders, CEO's, Directors & other Key Management persons who are the safe keepers of a company turn swindlers
  2. Compliance Issues: When the Government Policies and Compliance regulations make it tougher for company management.
  3. Internal Lapses: Lack of Risk management system Or Outdated Risk Audit Procedures
  4. Excessive dependency on internal & external legal & tax professionals
  5. Mismanagement by top-level
  6. Misguided investments & equity
  7. Trying to overreach the targets
  8. Lack of pre & post-litigation troubleshooting methods
  9. Profit repatriation issues
  10. Poor Compliance training

Reasons for Corporates paying heavy price: External Factors

  1. Falling for 'Gold Standard Consulting Services. Experiencing Clouds in the Horizon?.
  2. Unable to Audit the Auditor and check over/under auditing.
  3. Adopting Outdated Risk Audit Procedures
  4. Availing Corporate Advisory aiming at profits but not reduced risks
  5. Not engaging 3rd Party investigators, troubleshooters, and dispute resolvers to assist the company
  6. Nil or weak supply chain compliance check & audits.
  7. Poor 3rd party investigations
  8. Not Engaging Pre-Litigation Troubleshooters & Dispute Resolution Planners
  9. Excessive dependency on legal & tax consultants (internal & external)
  10. Excess by Authorities: When investigation agencies and autonomous bodies overreact in situations.

Need for Corporate Scandal Proofing Solutions

No company is immune to Scandals. ‘Only’ Top Management is responsible for Scandal, Risks, Losses and Reputation. Others mistakes or deliberate frauds can affect yours & your family members freedom. Private Business is not a Private Affair anymore. Scandal Proofing by experts is the best alternative.

  1. To Ensure safe operations by investigating internal complaints, potential legal threats, white-collar crimes, frauds, bribery and corruption issues, internal syndicates, Supply chain frauds, etc
  2. To Strategize if complaints (Internal/External) against your company or management are false and baseless
  3. To Control the damage if the charges by CBI / ED / Income Tax Dept / SFIO / Police against your company are false and the investigation is biased?
  4. Instead of depending on influential contacts, politicians and senior professionals after the problem arises.
  5. To Better Prevent Risks and Save Money, improve profits, reputation & credibility
  6. Reputation is inversely proportional to Risk. Managing reputation is everything.
  7. Most importantly, to secure personal & professional freedom.