Australian Corporate Lawyer - Autumn 2016

theAustraliancorporatelawyer
CAREER MOTIVATED MISCONDUCT
Employees who are tempted to do the wrong thing just to get (or stay) ahead
Robyn McKern
Robyn leads the McGrathNicol Forensic team
in Melbourne and has been the firm’s Chief
Executive Officer since 2011. Robyn has extensive
experience in dispute resolution and forensic
investigations gathered over a long career in a
range of roles.
Dean Newlan
Dean is a forensic accounting specialist at
McGrathNicol with more than twenty-five years’
experience, including investigations into major
corporate collapses and workplace fraud and
misconduct in business, quantification of loss
in commercial disputes, complex funds tracing
and fraud and misconduct control.
At the start of each New Year, many
employees are encouraged to
think about their personal
development and the contribution they will
make to the organisation for the year ahead.
This usually involves setting financial and
non-financial goals, and implementing and
self-managing a program to ensure they
meet the organisation’s expectations of them.
Frequently, there is a strong nexus between
goal attainment and career progression.
Employees are told they need to carefully plan
how they will achieve the ambitious financial
targets they have committed to. Inevitably,
some employees find themselves bending
or even breaking the rules to meet personal
goals and the organisation’s expectations and,
by extension, their own career aspirations.
In this article, we explore the phenomenon
of employees who act inappropriately to
meet financial goals in order to advance their
careers or even, in some cases, just to hold
on to the job they currently have. It also looks
at how businesses can identify and better
manage the risks associated with career–
motivated misconduct.
The Court of Arbitration for Sport (CAS)
recently overturned the AFL Anti-Doping
Tribunal’s “not guilty” findings in relation to
doping charges against 34 past and present
players of the Essendon Football Club. As
a result, the 34 players are banned until
November this year. There has been much
media speculation as to how this situation
could have arisen. Professional football
is a highly charged environment, and it’s
not surprising that some clubs and some
individuals making-up some clubs push
right to the boundary and, occasionally, cross
that boundary.
This is an example of how things can go
wrong in the sporting arena in order to
achieve superior performance, but there are
parallels in business where people respond to
pressures in ways reminiscent of the Essendon
case. Movies such as The Wolf of Wall Street,
The Smartest Guys in the Room and The Big
Short highlight a business culture of greed and
entitlement where the desire to make it “at
all hazards” leads to disastrous consequences
and, in some cases, criminal charges for the
corporations and the individuals involved.
Performance management systems and
career mapping encourage employees to take
responsibility for their personal development
in order to maximise their value to the
organisation in the short term, but also to
ensure that they can meet their career goals in
the longer term. Often, career progression in
the future is strongly linked to the individual’s
personal financial contribution to the business
here and now. It is made very clear to
employees in many organisations, that what
is good for the organisation is good for them.
Individuals who perform in accordance
with organisational expectations will be
rewarded and many will receive a bonus. But
almost certainly, their career prospects will
also be enhanced.
On the face of it, linking career progression
to financial outcomes makes good business
sense and, most of the time it works well for
the individual and for the organisation. It spurs
the employee to a higher level of effort, which
in turn is likely to achieve hoped for financial
outcomes for the organisation. But sometimes
things go wrong.
Problems start when ambitious employees
adopt certain behaviours which are, in
their mind, necessary to achieve financial
targets. These can include challenging, or
often stretching, targets that may have been
set for them but which they have agreed.
Unchecked, these behaviours can result in
irreparable career damage for the individual,
and reputational damage and unwanted
regulatory scrutiny for their organisation.
But what are these destructive behaviours
that are driven by the need for career
advancement? What rules are employees
prepared to bend or break in order to achieve
corporate and individual financial targets for
the benefit of the organisation in the shortterm,
but by extension, for their career in
the longer-term? Recent experience has
shown that some employees adopt a
“whatever it takes” approach to meeting
financial expectations in the hope of
furthering their careers.
Option 1 - Bribe your way to the top
Financial targets are usually aligned with
top-line revenue and/or profitability.
Achieving superior revenue and/or
profitability can mean:
• Converting more new opportunities
into sales;
• Generating more revenue from
existing customers;
• ‘Churning’ (winning over a competitor’s
customers); and
10 VOLUME 26, ISSUE 1 – AUTUMN 2016