Integrity and the Energy Patch
Memories of the Enron fiasco that rocked the energy sector in the early 2000s, other financial scandals and current economic and political events probably cause us to pause and wonder, “What went wrong?” And more importantly, “How can we prevent the same thing from happening in our own organizations?”
While the answers to these questions are complex, an understanding of psychological tendencies of individuals and groups can help to shed some light on the vulnerabilities we all have as human beings. For an excellent and easy book to read on this topic, I highly recommend Influence The Psychology of Persuasion by Robert B. Cialdini, Ph. D. The book is readily and cheaply accessible from internet booksellers.
I believe that without understanding human psychological tendencies and providing specific policies and training to combat them, business organizations can easily fail in meeting their obligations to shareholders and to other interested stakeholder groups, such as to important regulators (the SEC and FERC).
The AICPA, the Institute of Internal Auditors and the Association of Certified Fraud Examiners recently jointly issued a new publication to help organizations manage the business risks of fraud. The publication is called, “Managing the Business Risk of Fraud: A Practical Guide” The publication assists organizations to evaluate their own risk of experiencing fraud and helps in establishing relevant policies, detection measures and prevention strategies in this important area.
