Former Sommet Group CEO, Brian Whitfield, was recently sentenced to 20 years in prison and ordered to pay $26 million in restitution, for his role in the company’s $20 million insurance fraud.
During his trial, Sommet testified that he was not part of the fraud, but he blamed it on a series of poor business decisions, bad luck and mismanagement by other company leaders. Whitfield claims:
“My biggest mistake was not paying attention.”
Whitfield has already been convicted, so he is presumed guilty at this point, but let’s explore a scenario where his testimony was true. As harsh as it may seem, ethical leaders (especially at the top of the organization) are responsible for the behavior of others within their organizations.
Obviously leaders can’t prevent all forms of misconduct. However, it is critical to input systems that can help detect unethical activities as soon as possible. Being unaware is simply not acceptable and I say this with all humility.
The CEO of a multi-million dollar organization may appear to be glamorous but it also comes with a tremendous amount of responsibility. Perhaps you are an ethical leader or employee but I challenge you to assess the extent to which you are ensuring your coworkers are also behaving in an ethical manner.
I believe achieving this goal is an ongoing process. I can’t say I know exactly what all my coworkers are doing on a daily basis, but I can say our leadership team clearly communicates the importance of operating with ethics and integrity. They promote a culture that encourages ethical behavior. Doing this is the first step toward preventing misconduct.
Leaders should incorporate checks and balances into their operations, so single individuals do not have the control to defraud the company, its employees or investors. Involving more people in these types of processes helps reduce the potential for unethical activities to go unchecked.
Learn from others who have already made their mistakes. If you don’t have these check and balance systems already in place, it’s time to start paying attention. Doing so will help protect you, your organization and the general public.
Always remember, Leadership is a Lifestyle.
— Ryan W. Hirsch
Operations Manager, NASBA Center for the Public Trust (CPT)