It was nearly 6pm when Mina Sitzky put down the phone in a state of anticipation. She had been told by the recruitment agency that she had got to the second interview stage for a great job. If she got it, it would be a real move upwards at last.
She realised it was some time since she had felt genuinely excited about her career prospects. She was in her mid-30s and working as the regional distribution manager for an independent grocery chain. Her early career had been spent in secretarial or administrative positions, but she had slogged her way through a part-time MBA – not an easy task when you are divorced with three school-age children.
On graduating, she had resigned from her secretarial position and taken her present job. Although not highly paid, it looked after the bills better than secretarial work did. It was close to home, allowed her some flexibility in her working hours, and gave her a chance to demonstrate and develop her skills.
Times were tough for the few independent companies in this industry, and it was virtually impossible to earn the performance bonuses she had hoped for. She had earned only one in the three years she had been there. And, of course, there wasn’t much of a corporate ladder to climb, so she could not see herself advancing much beyond her present position. What’s more, the grocery business was in many ways conventional. The chain of command reigned supreme. People stuck to their part of the business and did not share information much. If you had to, you took your problems to your boss.
Her boss was the company’s state manager. He was considerably older, openly looking forward to retirement in five years or so, and did not believe in an open-door policy. Mina did not blame him for this. In this respect he merely echoed the culture of the rest of the company: you dealt with your own problems as far as possible. Moreover, he was often away at head-office meetings and, she felt sure, did not completely understand the new systems that she had brought in.
She got on better with a colleague at her own level, Tom Ploughman, an accountant and financial analyst. Tom shared her interest in improving the company’s systems. They had shared a few gripes about how hard it was to get people to come around to new ways of thinking. Tom understood her frustrations because he also reported to the state manager. But Tom was basically a relaxed individual who thought it was usually easier to work around obstacles than to try changing everything.
Just when Mina was beginning to conclude that she had gone as far as she could in her job, she had a phone call from an MBA colleague who worked for a multinational pharmaceuticals company. He told her it was about to hire a distribution manager for a similar territory to the one she was working in now. The starting salary would be more than 40% higher than she was earning and, with bonuses, she could take her salary well into six figures. There would be a company-funded car for personal use as well.
Her colleague would like at least to mention her name to his company’s head-hunting firm. Would she be interested? Somewhat startled, she hastily updated her CV. Sure enough, within a few days she was contacted by the recruiter and had a first interview.
So, things were moving quickly but quietly. The only person at her workplace she had told about the new job possibility was Tom, who had agreed to write a reference for her if he was asked.
The company put a high value on loyalty and Mina did not want to tell her boss until she had been offered the new job. Tom encouraged her. He was the best person to write about her abilities anyway. He knew much better than the boss did how her new systems worked and what improvements they had brought about. “Go for it,” he had said. “There aren’t really any comparable jobs they can offer you elsewhere in the company. And, let’s face it, the prospects in the rest of the industry at the moment are pretty thin.”
She was just collecting her things to go when she heard a tap on the door. She was surprised to see it was Jason Turner. He was juggling a bunch of folders and did not look happy. Jason was an administrative assistant in his early 20s who formally reported to Tom but also did some paperwork for Mina. She regarded him as a person who took his job rather casually and lived for the weekends. Certainly, it was unusual to see him working as late as 6pm. Even so, thinking of her own experience, she had encouraged him to consider further study, and lately he seemed to be taking her idea seriously.
“I know you’re just going, but can I talk to you for a few minutes? There’s something I need to discuss with you.” he said. “It’s about these reports. I just can’t seem to get on top of them.”
“Well, I don’t see that I’m likely to be able to help you,” she said. “That’s really something for you and Tom – I mean Mr Ploughman – to figure out. If you really feel there is too much work for you to deal with, I’m sure he would be willing to talk about it with you.”
“No, that’s not what I meant,” Jason said. “These are reports from a few months ago, not something I have to do now. The problem is that I think there’s something weird about them. I went back to some original files just to see how I had entered something a while ago, and now I just feel sure the final reports are not quite right. There are expenses listed here that I never saw the paperwork for, but the cheques have been signed anyway …” He trailed off, looking awkward and worried. “It’s not the first time I have had this feeling, but before, I just thought I had got it wrong. I don’t really know how to say this, but I think there’s something dodgy about some of those reports.”
They talked some more and Mina briefly looked at the material Jason had brought with him. She did not understand the format of the reports; they were different from the warehousing reports she received regularly. In any case, the amounts Jason was concerned about were not large, about $50 and $70 here and there. The largest was only $100. But they would add up to a large amount after a year or two.
It was true there was not much explanation attached to some of the entries, but perhaps that could be explained by the delays in implementing Tom’s new systems. Tom had complained as often as she had about how long it took to establish something new in the company. There could be any number of other explanations for a few items that did not match or were not documented. She had never noticed anything irregular in the way that Tom handled the accounts in her part of the company, or her expenses.
However, Mina was beginning to understand Jason’s concern, and her own. You need to be pretty sure of yourself before you point out something that might amount to an accusation of dishonesty. Had Jason simply misunderstood something? And, to whom could Jason complain if the problem concerned his own boss? She knew why it would be difficult for him to bring the matter to the attention of the state manager. That would be bypassing the chain of command. In any case, the state manager was out of town and, as he had made clear to her, he preferred people to look after their own affairs.
She thought about what she knew about Tom. His healthy lifestyle did not seem to fit with supporting a hard drug habit or a gambling problem, and the small amounts of money involved did not seem to fit either. He owned a late-model car and was paying off a townhouse; nothing his salary would not cover. He did not seem to be anxious about money.
She was tempted to tell Jason to relax and forget about it, but she could see that he was really concerned. He had come to her because she was interested in him and he felt that she would take him seriously, even if he was mistaken. In the end she suggested doing nothing for the moment and she would give it some thought. But as she drove home no inspiration came. She was aware that she could do nothing to look into the issue without Tom being aware that the query came from her. Of course, she had said nothing to Jason about how much her job hopes rested on Tom’s good opinion during the next few days.
Does Mina have any obligations in a strictly legal sense? What ethical obligations does Mina have? What aspects of the organisation itself – its structure, culture or systems – seem to have contributed to the problem? What would you do if you were Mina?
Proposed Solution #1
Geoff Hines is managing director of Hines Management Consultants, a firm of executive search and selection consultants in Queensland. He was previously personnel director for Uncle Ben’s of Australia and general manager, employee and public affairs, for MIM Holdings. He is a past president of AIM and a Life Fellow of the Institute.
This is a very delicate ethical and legal problem for Mina. All that is clear at this stage is that there are some unexplained discrepancies in the reports, and these should be investigated forthwith.
Legally, if she does not take any action, she may be accused of condoning fraudulent behavior. Not being a lawyer, I am unsure what law she might break, but I think there is something called “accessory after the fact” or similar.
Ethically, she has to take action, because a junior employee has come to her for help and advice. He does not know what to do. She is the only person he can turn to.
The aloof management style of the state manager has obviously contributed to the problem, as well as the overall culture of the firm, which would make it difficult for Jason to talk to him directly about this problem. He would also not be looking forward to hearing about a delicate problem like this as he is so close to retirement. Anyway, at the moment, he is out of town and may be uncontactable. If he can be contacted, then Mina should call him and appraise him of the situation. She could then suggest that a professional accountant examine the unexplained discrepancies in the financial reports.
To that end, the finance controller or finance director at head office should be involved and there should be an investigation by the internal audit department or by the company’s external auditors. At the same time, Mina should discuss with the state manager what should be said to Tom Ploughman about what is happening.
If the state manager cannot be contacted, Mina should call head office herself and speak directly to the finance director about what has happened and ask for an immediate investigation. It might be appropriate for the finance director, or a nominee, to meet Jason privately, to look at the financial reports that he is concerned about and see the evidence for themselves. This could take place discreetly outside the office and after work.
The state manager or the finance director should have a talk with Tom Ploughman. The finance director is probably his functional line manager and could talk to Tom in the absence of the state manager. It will be in Tom’s best interests, as well as the company’s, that these issues are cleared up as quickly as possible.
Pending the investigation, it may be appropriate that Tom be asked to stand aside until it is completed. Whatever the outcome, whether it is a case of fraud or simply reporting errors or mistakes due to a bad system, it is best for everyone concerned that it is cleared up completely.
With regard to a reference for the new job, Mina should not be concerned. It would be highly unusual to use a close colleague as a referee, particularly from her current workplace. Professional executive search consultants should not rely on a reference from a colleague. They should be seeking references from people who have acted as Mina’s line manager.
The reserve position is for the new company to offer her the position subject to a satisfactory reference from her current state manager. She can then decide to accept the offer or not, depending on her own estimate of the situation.
In summary, though this is a difficult and sensitive problem, there are clear legal and ethical reasons why Mina should report her conversation with Jason to her state manager and the group chief finance executive. If there has been no fraudulent behavior, then Tom has nothing to fear, except possibly being reprimanded for unsatisfactory recording and reporting.
Proposed Solution #2
Hayley Chambers is an executive manager with Select Australasia, a global human capital management organisation. She has been operating in the recruitment and consulting field for more than seven years, focusing on human resources issues in the private and public sectors.
In a strictly legal sense, there is nothing that says Mina must report the issue raised by Jason to the police or her employer. However, if it is not dealt with, and Tom is found to have committed a criminal act, then Mina will be considered an accessory due to her knowledge of the situation.
Should Mina choose to disclose this information to a superior, then both parties must not consider repeating or “publishing” it without obtaining full and conclusive evidence. Otherwise it could be defamatory of Tom.
Ethically, Mina has other issues to consider. Loyalty and respect among peers are expected in her company, as in most companies, so it is in her employer’s best interests for this situation to be properly investigated. It is also in Tom’s best interests, as a colleague, for her to ensure that the problem is resolved quickly and quietly. By letting this issue slide, it will no doubt gain momentum and more than likely will leave a question mark hanging over Tom’s honesty and integrity.
We are all human. Mistakes will happen from time to time. More so, mistakes and miscommunication will occur if a corporation’s culture, structure and systems are not designed to support their employees. In this case it seems that the support in all of three of these areas is lacking.
A possible solution would be to speak to Jason again and examine the grounds for his suspicions, ensuring that he understands the need for discretion to avoid any defamation and that Tom is innocent until proved guilty.
I would then empathise with Jason’s difficulty in discussing the issue with Tom but would advise him that he should do so. I would urge Jason to openly and honestly discuss his findings with Tom in a non-threatening manner to get an explanation for the discrepancies in the reports.
If Tom were unable to give a clear explanation then I would advise Jason to take the issue to the next level of management. I would ensure that Jason is aware of my full support and that, should the need arise, I would assist him towards a positive outcome for all concerned.