Counting the Cost

I was recently at the inaugural screening of the film ‘Counting the Cost’ , a film written and produced by Duncan Wiggetts for DLA Piper . It portrays the actions of the non-executive directors as they cope with undetected fraudulent conduct of some members of the management team. It’s not a true story, but given that the film is so well written (and acted) it could easily be mistaken for real life. The film looks at the challenges around preventing and detecting fraud and the importance of effective controls.

An esteemed panel were invited to provide their feedback and comments to a mixed audience of some 100 Lawyers, Accountants and Non-execs. Introduced by Graham Durgan of the Non Executive Directors Association (NEDA) and moderated by Duncan Wiggets and Neil Gerrard from DLA Piper, the panel included the likes of Donald Brydon , Chairman of Smiths Group and Royal Mail and Robert Wardle, a former Director of the Serious Fraud Office.

The event provided a lively debate, particularly when the post mortem revealed charges of dishonesty, fraud, conspiracy to defraud, fraudulent trading and bribery against the CFO.

Non-executives today are expected to act with a high degree of independence and have the skills and capability to manage the interests of stakeholders and shareholders alike. This has recently been highlighted in the case of Torex Retail, where Edwin Dayan, former Chief Technology Officer and Christopher Ford, former Finance Director of subsidiary Xn Checkout Limited, were charged by the Serious Fraud Office with conspiracy to defraud, false accounting and misleading an auditor.

These are the challenges we face in an increasingly regulated market requiring greater privilege and disclosure.

Fraud – If it’s too good to be true…it probably is

Off to the Ipswich and Suffolk Small Business Association (ISSBA) Fraud Forum last night just outside Ipswich.

This was a question and answer session with the police, legal profession, anti-fraud consultants and rating agencies. Unfortunately the audience for the most part were there to give vent to their frustration at various frauds they had suffered, poor police response and a desire for some government agency to prevent spam emails.

It was hard work for the panel to get over that prevention was the key. Once the fraud had taken place you would be out of pocket even if there was a successful police investigation. You need to be on you guard – if it sounds too good to be true then it probably is. There are too many small, provincial traders ready to sent over £10,000 of goods to Nigeria and are amazed when the payment goes bad. I was left thinking that with a small amount of the sort of advice a Finance Director gives, many of these frauds would have been prevented by suitable internal controls.

Phil Greenwood