Addressing Stock Losses and Fraud


In the absence of a “proper” risk mitigation plan and loss control blueprint, South African
business owners will never really address the critical levels of theft and fraud impacting on our
economy, according to commercial investigator and international risk consultant,
Kyle Condon, Managing Director at D&K Management Consultants.
Experience has taught me that trust and effective loss control do not go together. We live in a society where a criminal presence is constantly lurking around us. Old style security measures and trusting of everybody has left businesses open to losses like an open wound exposed to a sewer.
“Employees need to be watched continuously and loss control tactics need to be revised to accommodate this,” says Kyle.

In the budget
With many businesses operating on shoe-string budgets, security is often one of the first things to go. Ironically, says Kyle, “It should be one of the portfolios that gets additional budget assistance. When companies cut security, those employees who were always dissuaded from going through with criminal action often go over the edge and ‘raid the cookie jar’.”
Sadly, most companies choose to ignore red flags and continue to fool themselves into believing that the presence of a uniformed security officer or two is adequate to prevent and deal with internal criminal activity. Kyle believes that ‘old school’ security is a thing of the past. “It is time we accept that our businesses, like our homes, require proper defences.”

Many managers are just too afraid to confront the issues or speak out for fear of being branded or painted with the race brush. As a result, policies and zero tolerance are eroded. Unions have gained a lot of power, often holding companies to ransom when it comes to enforcing strong security measures. Polygraphs, for example, are always declined by Union reps, while searching procedures get labelled as an invasion of one’s privacy, etc.
Modern day loss control and security plans must include the following key concepts:
• Internal investigation specialists (undercover agents).
• Quarterly sweeping and debugging of executive offices and meeting rooms.
• Strike action plans, designed specifically for the individual company and its employees to provide proper Duty of Care during strike action.
• Alignment with a reputable forensic investigator or company who understands the methods, methodology and principles of fraud and financial crimes in the workplace.
• Thorough pre-employment screening of new candidates, including checking of criminal records through fingerprinting.
• A steadfast CCTV viewing plan conducted off site by an independent viewer, providing monthly viewing reports covering all aspects of risky behaviour, suspicious actions and overall health and safety concerns.
• Travel risk reports for employees traveling to potentially hostile environments both locally and internationally. This would include arranging VIP protection, where needed.
• Annual security surveys to address all shortcomings of the physical security measures of the business.
• Before stock or material leaves for suspicious clients, an investigation unit should first check out that all is above-board, and that you are not being scammed.
• Handing over the time consuming and demanding security portfolio to a dedicated and qualified loss control manager.
“I do not agree with companies splitting up the security portfolio and contracting different players for various things. Managing this portfolio is a job that requires full time participation.
“Defending your company requires a modern day ‘warfare’ approach. Intelligence, logic, expertise and strategy have replaced uniforms, guns and electric fences to a large extent,” Kyle concludes.

D&K Management Consultants