The good news? Rather than more wrongdoing at large companies, PwC attributes these figures to:
- increased public scrutiny of CEOs and their behaviour
- stricter governance and regulations
- the 24/7 news cycle
- the ethical risks inherent to doing business in emerging markets and through global supply chains
- increased reliance on digital communications such as email, text messaging and social media, which create permanent records of misconduct
PwC analyzed CEO successions among the top 2,500 public companies worldwide for the study, and defined a forced removal of a CEO as one being the result of a scandal or improper conduct by the CEO or other employees, such as fraud, bribery, insider trading, environmental disasters, inflated résumés and/or sexual indiscretions.
In addition to pointing to the reasons for the bump in forced turnover, the study indicated several measures companies and their leaders could take to lessen the risk of CEO removals:
Establish a Culture of Integrity — Communicate the company’s values and ensure that every employee understands how they translate to the work they do every day.
Match Your Metrics — Vet how you evaluate performance to ensure that your company isn’t inadvertently pressuring workers to bypass rules.
Create Controls — Put processes and financial controls in place to help minimize opportunities for unethical behaviour.
You are responsible for ensuring financial statements are free from material misstatement — whether caused by fraud or error. Organizations of all sizes can now harness the capability and added assurance of applying the Ai Auditor to its internal controls. Equally important, we review 100% of your transactions, Your auditor samples 3% of them.
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We’d love an opportunity to show you the value we can bring to your organization:
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- For M & A Firms and Investment Bankers — Anomalies in financial transactions and GLs tell a lot about a company’s character.