Invisible Wounds: Risk to the One Percent...

There is an alarm bell ringing within the ranks of Operational Risk Management executives in the United States.  As brave, experienced and motivated veterans enter the U.S. civilian work force, it is growing louder by the hour.  Our "One Percent" who serve in the military, leaders returning from over a decade of war and those who have earned the Global War on Terrorism Expeditionary Medal (GWOTEM), now have a new adversary.  Does your organization hire veterans or spouses of vets?  How are you taking an active role in the veterans hiring, career goals, aspirations and training?  What are the potential indicators of an employee at risk?

Melanie Haiken, Contributor - Forbes
Almost once an hour – every 65 minutes to be precise – a military veteran commits suicide, says a new investigation by the Department of Veterans Affairs. By far the most extensive study of veteran suicides ever conducted, the report, issued Friday, examined suicide data from 1999 to 2010.

The fact is that about 31% are vets, who are under 50 years old and in the prime of their lives and careers.  The Operational Risks associated with a growing workplace with veterans comes in different areas of concern and opportunity.  The awareness building program within a workplace, that is focused on mitigating risks to the enterprise, should be focused on behaviors and pre-incident indicators.  Especially when it comes to humans.  "Invisible wounds" are just that.  They are hard to see.

Has your organization been faced with an employee, who was a veteran and took their own life?  The cues and clues may not be so obvious.  Human Resources departments, Organizational Development management, senior executives are starting to hear that alarm.

There are people walking around your organization at this very moment, who are at risk and you may be naive to the indicators.  Begin the process today to change this growing epidemic.  Create a mechanism for awareness building, of the potential pre-incident indicators.  More importantly, what are you doing to proactively evaluate and monitor employees who are veterans?

60 Minutes - Invisible wounds of war by David Martin
An estimated quarter million servicemen and women have suffered concussions over the past decade of war. Tens of thousands -- no one knows the precise number -- are dealing with lasting brain damage. The Pentagon, which did not recognize the problem until the war in Iraq was almost over, is now scrambling to treat these invisible wounds. And soldiers suffering from them sometimes end up wishing they had a wound people could see.

There are programs for building awareness with employees and even a growing number of non-profit organizations that are making a difference.  The point is, what is management doing to proactively engage fellow executives to be more proactive on multiple fronts?  Here is one example that you should be investigating immediately.  Pretend for a moment that you as a CEO, are a veteran that is applying for a job at your company.  Go to your own career web site page and apply for a job at your company.  Why?  See how easy it is.  See what happens next.

The reason is clear.  You don't have any idea what a veteran goes through to first apply for a position with your company.  Second, you do not fully understand, how your own HR and recruiters follow-up and provide any feedback to the applicant, once they have navigated the vast maze of your latest outsourced online job platform.

We would also request, that you investigate your organizations process for doing periodic assessments of employee performance?  How is this the same or different for a veteran?  Has it been modified or is it done with a trained professional, who may be able to use substantial experience to provide an early warning system for vets, who may be at risk in your workplace.

Whether you are in the military ranks now as a commander or you are an executive in the government, business or part of a non-profit, you think you know the stakes.  You think you understand the Operational Risks associated with the hiring and employment of veterans.  You do not, because no one does completely.  This complex mosaic of laws, health care and human psychology issues may very well be, one of the greatest operational risk challenges before us as a nation.

Begin your journey to better understanding this, by visiting this U.S. Department of Veteran Affairs web site:  http://www.veteranscrisisline.net

This Memorial Day, we will remember all those heroes who have fallen, especially here at home.  In our own town.  We can and must do better...

Offshore Strategies: Global Integrity Risk...

Global 500 organizations are managing Operational Risks across their respective enterprises, utilizing a portfolio of controls, tools and strategies.  One of those strategies, is getting more attention by nation states and treasury departments.  Larger than Wikileaks, this ICIJ investigation, is a digital peek behind the offshore strategy that is legal in many jurisdictions across the world:

An anonymous source has provided extensive insights into a worldwide network of tax evaders. 

Media in more than 30 countries are currently sifting through a mountain of data.
260 gigabytes of documents - that's the printed equivalent of 500,000 copies of the Bible. 

This is the massive amount of data that was passed on more than a year ago by an anonymous whistleblower to the International Consortium for Investigative Journalism (ICIJ) in Washington. More than two million emails and other confidential documents sketch a picture of a dubious shadow world. More than 130,000 people from 170 countries are alleged to have secreted their money in tax havens. Analyzing the data is a mammoth task that is still nowhere near completion.

The governance and the transparency that a global enterprise displays to its shareholders, employees and the governments is continuously at stake.  Some countries are considered more corrupt and global organizations operating in that part of the world, shall be more aware of the risks of doing business there.

Some other interesting revelations:

• The largest shares of the people setting up offshore accounts live in China, Hong Kong, Taiwan, Russia or another former Soviet republic. 
• In turbulent Greece, both the upper and middle class are increasingly keeping their money in undeclared accounts — a situation that finance officials have since vowed to investigate.
• A number of the world’s largest collectors use offshore accounts to buy and sell art without paying taxes. 
• Offshore accounts are popular in Russia, where President Vladimir Putin has repeatedly asked politicians to stop using them: the deputy prime minister’s wife and top managers of Russian military contractors and government-controlled companies are thought to have secret offshore investments. 
• Offshore accounts are a major source of investment in China and Russia. China’s second-largest source of capital investment is the British Virgin Islands.
• You can read the full ICIJ report here.

Billionaires and politicians are hedging risks on the advice of tax attorneys, accountants and the financial strategies that are as old as tax laws.  Inside the private business compliance and legal departments, lie a vast staff of dedicated personnel who are tasked with mitigating risks to the organization.  Some global enterprises such as Siemens AG have paid the price, of a governance architecture that was in failure.  Today, those lessons learned are still being taught even as others are implicated in alleged wrong doing:

IBM Says Justice Department Investigating Bribe Allegations
By Sarah Frier on May 03, 2013

International Business Machines Corp. (IBM) is being probed by the U.S. Justice Department over corruption allegations in Poland, Argentina, Bangladesh and Ukraine, adding to bribery charges from the Securities and Exchange Commission. 

The Justice Department is investigating whether IBM violated the Foreign Corrupt Practices Act, the company said in an April 30filing (IBM). In Poland, the department is focusing on a transaction that the Polish Central Anti-Corruption Bureau already was studying, the company said. It involves allegations of a former IBM employee selling to the Polish government. 

The Justice Department probe adds scrutiny in new territory as IBM tries to settle with the SEC over activity in China and South Korea. The global reach of the investigation indicates that this isn’t an isolated matter, said Charles Elson, corporate-governance professor at the University of Delaware. 

“If it happens in one country, you can say it’s an individual,” Elson said. “If it happens in multiple, you have to ask, is it systemic? And how well was the compliance program put in place to prevent it?”

So what can a General Counsel, VP of Operational Risk, Chief Risk Officer or even the Audit Committee do, in light of these continuous incidents?  The trust that any person or organization has with its bankers, outside counsel, compliance subject matter experts, accounting advisory and management consultants is at stake.  The integrity of the entire global payments and economic ecosystem is at risk.  This source of systemic risk to governments, global enterprises, stock markets and average consumers is growing beyond control.

What can be done?  The serious conversation going on right now between your independent counselors  continues to focus on trust and the people who are behind that trust.  You have got to have that serious conversation as a CEO, not with your first line of management Vice-Presidents, but several layers below them in the corporate hierarchy.  Believe us when we say, as the CEO, you can't see two layers below you, where all of the real work on daily transactions is getting done everyday.  You are not on the front lines, where deals are being made and information is being exchanged that can have a material impact on daily business.

You see, it really all still comes back to people communicating information ethically.  How and when people act on that information.  Why people behave the way they do when they learn the information.  As a CEO in charge of a global enterprise you will never have the transparency or the integrity being controlled from HQ on the executive floor, or on your executive analytic GRC dashboard.  Your only chance is to reach those people, who are at the source of doing business in your line processes, not staff, but "line".  The "line" is the life blood of daily business commerce and the power base for making a difference on how business is done and the integrity behind it.  The future of your enterprise depends on these people, communicating information that is true, validated and researched to uncover any possible errors, omissions or other ethical issues.

The power base of the global economy is constantly changing.  The risks to the economic enterprise continues and the investigations are just beginning.  Offshore strategies are at the core of global integrity risk.