What is the most valuable asset of any company? Simple. It’s people. A company may have the best technology, the best product, the best sales team, even the best support, but without solid, ethically-sound people, a company will be at risk. A peril may lay dormant, but come out of remission and destroy a company like a cancer. What is that? It’s unethical, perhaps even illegal conduct by it’s leaders, management, or rank and file employees. Who’s the gatekeeper? Who is the first line of defense against hiring unethical employees? The HR department.

My background is very unusual to say the least. I’m a former CFO of a Fortune 500 healthcare company. The company was visionary, dynamic, and had a great reputation in patient care. In fewer than 15 years, the company grew from an idea to over 2000 locations in all 50 States and 5 countries. Annual revenues exceeded $4 Billion, over 20,000 employees worked for the company, and we were a darling of Wall Street.

However, underneath the glimmering corporate office, a fleet of corporate jets, and “consistent” earnings reports, laid a multi-year multi-billion dollar financial statement fraud. As a circuit court judge later ruled, the CEO of the company was “The CEO of the Fraud”. I began with the company in a mid-level management job and eventually became its Chief Financial Officer.

Regrettably, over a 17 year career, I became aware of the fraud, became a participant in it, but eventually came to my senses and reported the fraud to government agents. The revelation of the long running fraud was nearly fatal to the company, and only because of the hard work of a solid, subsequent management team, they avoided bankruptcy and survived.

I’ve accepted responsibility for my former actions and am now committed to turning my own poor decisions and personal experiences into a learning exercise for others. I speak frequently to professional associations and university students on the need for ethical conduct in the workplace, the red flags of unethical activity, and the consequences of wrongdoing – not on those who commit wrongdoing—but more importantly on the innocent.

In the upcoming BLR webinar “HR in Corporate Compliance: Meet the Challenge of Promoting Ethical Behavior and Limiting Liability”, I will illustrate red flags of applicants and existing employees.

There’s a popular saying: “How someone acts on the golf course is how they act in business”. Golf is a unique game. It’s one of the few games in which players call penalties against themselves—and it clearly illustrates how someone acts when they believe that no one is looking. In a nutshell, I believe there isn’t a strong difference between one’s personal life and business life. Within the confines of labor law regulations, I believe that HR personnel may use this parallel in their hiring and retention policies. And I believe there are effective tools to aid the HR professional to this end.

In the event of corporate malfeasance, the HR department will be susceptible to scrutiny. Will you be prepared? Or will you have been proactive in minimizing its risks to begin with? Perhaps as a recruiter, you are very effective in qualifying candidates based on credentials and work history, but have you defined what character candidates must possess to meet the companies goals? In maintaining corporate compliance and integrity, have you identified those values in employees that would signal a compromise in their professional standards?

I look forward to the webinar on February 24, when we will flesh out these and other topics aimed at promoting ethical behavior and limiting liability.

Weston Smith (www.westonsmith.biz) speaks frequently on ethics and integrity within business. He is passionate about teaching others the fruits of living and working responsibly, and the consequences of unethical conduct.