As crimes are rampant across the US, businesses of all sizes and scales are at risk. Threats go beyond the ones perpetrated by outsiders, such as theft, robbery, and vandalism. There are massive risks from within the organization because dishonest employees can engage in acts like embezzlement, fraud, unlawful siphoning of funds, and manipulation of financial and business information. Even as these white-collar crimes are non-violent, they can kill enterprises financially. The damage extends to liability and loss of reputation, which is even worse.
Dealing with such crimes is often challenging for business owners because you may come to know when it is too late. Detection is a significant concern because the most trustworthy employees are often the ones who are often responsible.
Things can get even trickier for entrepreneurs who have just started and have limited experience with business operations. While the situation has several serious implications, it can be curbed if you have the right measures in place right from the start. Here are the strategies you can rely on for safeguarding your new business against white-collar crime.
Have strong ethics for your team
For a startup, the team is the foundation that it rests on. A strong team with solid ethics is vital for a new venture that wants to keep unlawful acts at bay. It would be best if you went the extra mile to cultivate ethics in your workplace culture and convey it as a priority to everyone on board, be it the top-level executives or the labor staff.
Start right at the recruitment stage, hiring only people with a clear background record and a strong sense of ethics. A background check is the smartest element you can include in your recruitment process. Also, communicate the consequences of wrongful actions clearly so that employees are dissuaded from committing such crimes.
Implement a zero-tolerance policy
Just conveying the consequences of criminal acts to the employees may not be enough. It is best to go the extra mile by implementing, publishing, and executing a zero-tolerance policy for unlawful activities such as theft and fraud at the workplace.
A large number of businesses across the US are already incorporating this zero-tolerance clause in their employee agreements. Startup owners should ensure that the policy is included in the onboarding process and documentation so that none of the employees misses out on the information. A robust prevention strategy is the best defense that any startup can invest in. Follow zero-tolerance as a rule, regardless of the position and authority of the person who has committed the crime.
Invest in an effective monitoring system
You may have the best and most trustworthy people on board, but you can never be sure. Moreover, showing zero-tolerance against wrongdoing may not be enough to motivate people to stay clear, and they may still try to defraud your startup.
It often happens because experienced professionals see new founders as a good opportunity due to their inexperience. You can easily make up for this lack of experience by investing in an effective employee monitoring system. Ideally, it should include physical elements such as cameras and motion sensors and cover cybersecurity as well. With a monitoring system in place, you will be able to track employee activities and deter them from criminal acts.
Consult a business lawyer
A seasoned business lawyer is the best person to guide an entrepreneur in protecting the startup from the implications of white-collar crimes. While such acts can cause internal problems, things can get even more serious if employees defraud a client or authorities.
You will need to build your defense if the other party goes on to file a criminal lawsuit. Hiring a criminal defense lawyer who knows the law of your state is the only way to save your skin. For example, you will need an attorney to help in criminal trials to handle litigation and guide you about the legal action you should take against the guilty employee.
Regulate the Internet usage
Statistics indicate that a large proportion of white-collar crime in the US is committed through the internet. Unscrupulous employees can easily access the confidential data of the business through the internet. It makes sense to invest in cybersecurity, particularly if your startup deals with clients’ and customers’ confidential personal and financial information. Having a specialized cybersecurity team puts you in a safe place. Additionally, you should also regulate the use of the internet on business premises. Limit access to questionable websites.
Practice regular internal audits
White-collar crimes like bribery, money laundering, and embezzlement have something to do with money, so you must pay attention to money matters at all times. Regular internal audits go a long way in ensuring that the funds are in the right place.
They also discourage the employees from sneaking dollars unlawfully out of the company, no matter how small the amounts are. You may even do surprise audits because they allow you to catch the guilty employees unawares, and there are good chances that the culprits will be intimidated.
Encourage anonymous reporting
Employees are hard to trust, no matter how great their records appear. Despite the best efforts, you may not be able to keep an eye on their activities constantly. It is easy to seek other team members’ help to monitor and track their co-workers and report anomalies as soon as they see something amiss.
Providing an anonymous reporting system for the team can make all the difference because it will make people more comfortable voicing their concerns. Once you have anonymous reports, you can go ahead with an independent investigation and follow-up actions to nab and punish the guilty person.
Staying one step ahead of white-collar illegal acts can go a long way in keeping your startup safe from internal and external issues. Although it may take some time, effort, and investment to implement these measures, they are worthwhile considering that they can save your business from legal and financial implications in the long run.
You can also prevent reputation damage, which matters even more, when you start your entrepreneurial journey.