Precedent Sets a Standard

Editor’s Note: This post is from regular contributor Norman Katz, Sourcing Innovation’s resident expert on supply chain fraud and supply chain risk. Catch up on his column in the archive.

As a long-time and avid newspaper reader I keep up-to-date with what’s going on locally and nationally, even if I find out the day after. I can’t imagine starting my day without enjoying a healthy breakfast while reading the newspaper. I read through all sections, though I may not thoroughly read each and every article. I also make sure to read through the letters to the editor, not just to find out about goings-on I might have missed, but to gauge outrage or support for a particular topic.

The wife of the Fort Lauderdale (FL) chief of police fired a gun at her husband while in their home and then proceeded to fire off two more shots outside the home as she was chasing him. The police chief’s wife was apparently quite distraught over his suspected cheating which, to my knowledge, has not been proven or disproven. Fortunately no one was injured as she missed not only her husband but also any innocent bystanders. In statements she informed that she did not mean to specifically put a bullet in her husband, but was distraught and looking to get his attention or something to this effect.

During her recent court hearing, the gun charge was thrown out as if no gun was used at all, and the wife was charged with lesser offenses.

Based on the letters to the editor, there is considerable outrage that — it would seem once again — money and political connections favor those who have them in what should be courts of law that are supposed to be neutral ground where only the law should be discussed. This is — from my understanding — especially true in criminal cases where laws are written down and are relatively “fixed”, as opposed to civil cases where precedent (prior case outcomes) sometimes set a standard. The newspaper’s own “news columnist” was also quite direct in his criticism of how this case was handled, and asked whether regular folk in the same situation would have been treated the same.

But there is a bigger issue in here in how this particular courtroom drama is playing out: how the precedent of this case will set a standard for future cases. There is no disagreement that she fired three times from a gun while aiming in the direction of her husband, who has not pressed any charges against her. The outrage from the community is that someone with lesser political connections and financial resources would have been treated much differently — and more harshly sentenced — by the court. With full admission that she did fire a gun three times, how is it possible for this fact to be simply omitted by the court when considering her punishment for breaking the law? Based on quotes in the newspaper from legal experts, quite a few people are wondering about this.

Organizations must set clear rules on how it stands for fraudulent behavior, and must definitively abide by its own rules in administering actions against employees, customers, or suppliers who perpetrate fraud.

To fail to create and publicize clear rules may make it difficult for the organization to punish fraudsters, especially when it’s their own employees. Organizations should not be complacent in believing that all employees understand what constitutes correct behavior, and an employee’s status has shown to not be a good indicator of such knowledge.

To fail to adhere to policies in terms of actions — which may include and require termination — against employees who are found to have committed fraud sends a clear signal to everyone else that the organization lacks the fortitude to follow through and make the hard — yet necessary — decisions. This could easily serve to actually encourage more bad behavior because employees who were possibly on the fence about committing fraud now know that there is no punishment if they get caught.

If your organization does not have policies for behavior and procedures for violations of behavioral standards, there is a risk of allowing bad behavior to be conducted, if not also condoned, and being left with few repercussions to deal with the source of the problem.

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Norman Katz, Katzscan