We use cookies on our website. Find out more or ignore

Why good people make bad choices

09 November 2017 by Henry Ker

Why good people make bad choices - read more

Boards should be wary of what they are incentivising their employees to do

There is a different feel to this month’s cover interview. I spoke to Walt Pavlo, Jr, who was convicted of embezzling $6 million and spent two years in federal prison. Pavlo’s story is a cautionary tale of disillusioned and isolated employees put under pressure to achieve impossible results.

‘It did not make sense to me that people could be unethical, with low business standards, and be so rewarded. I felt that I had two choices: one, call everyone out for what they were doing, or two, join in. Regrettably, I chose the latter’, he said.

Since his release, Pavlo has offered his insight to business schools, accountancy firms, and even the FBI. ‘There are three components [to white-collar crime]: the pressure, the opportunity … and how a person rationalises it,’ Pavlo says, ‘There is context to the crime’.

PwC’s Max Klugerman echoes this in his article on corporate culture here: ‘Efforts to prevent the next scandal ... [are] spurred by our growing understanding of how individuals’ environments, and their perception of them, plays a large role in decision-making.’

Pavlo’s story resonated with me on the current debate around inequality – and in particular, the exceptionally high levels of executive pay in comparison to the average worker. If the situation continues to escalate there is a danger organisations will breed cynicism among their employees that means they feel justified in taking drastic action to try to, in their eyes, readdress the balance.

As he says: ‘It is important for the authorities, or the businesses, to be able to understand and recognise why an otherwise good person will make such bad choices.’

You can read the full interview with Pavlo here.

Elsewhere, ICSA has released new guidance on the EU General Data Protection Regulation (GDPR). Data protection is an issue which seems to be surrounded by confusion and apprehension. This extends to an organisation’s own assessment of its own preparedness. According to an August KPMG survey, a mere 6% of the FTSE 350 say they are completely prepared for GDPR, while in our own Boardroom Bellwether, 93% considered themselves ready.

Inevitably, the key is once again culture. ICSA’s Liz Bradley explains: ‘[A positive] culture of data protection, transparency and accountability envisaged by the regulation will be more likely to be considered trustworthy by the public.’

Henry Ker is editor of Governance and Compliance

LATEST ARTICLES

Sacha Sadan: ESG is now mainstream

Sacha Sadan: ESG is now mainstream

27 July 2018 by Henry Ker

Sacha Sadan FCIS, director of corporate governance at Legal & General Investment Management, talks about why ESG issues are more than a passing fad. Read more...

The Wates principles: Supporting governance in private companies

The Wates principles: Supporting governance in private companies

27 July 2018

As the regulatory gaze turns onto the country’s large private companies, the new Wates governance principles offer a framework for reporting. Read more...

Weighing up experience and qualifications

Weighing up experience and qualifications

26 July 2018

Sponsored: Employers should consider the value of experience against academic credentials. Read more...

ICSA Conference highlights

ICSA Conference highlights

26 July 2018

Launching new guidance and a chance to meet members and friends. Read more...

Moving disability up the governance agenda

Moving disability up the governance agenda

25 July 2018

With disability affecting 15% of the world’s population, forward-thinking organisations are already building a more inclusive future. Read more...

A guide to better board reporting

A guide to better board reporting

25 July 2018

New guidance to refine the flow of information to the board and transform decision making. Read more...

David Lock: The importance of serving with integrity

David Lock: The importance of serving with integrity

25 July 2018 by Henry Ker

The master of the WCCSA discusses his time helping to rebuild higher education systems after conflict in Iraq and Libya, and the work of the WCCSA in supporting the company secretarial profession. Read more...

For charities, digital offers both opportunity and risk

For charities, digital offers both opportunity and risk

25 July 2018

But there is a wealth of guidance available to help. Read more...

Is the plug about to be pulled on the gig economy?

Is the plug about to be pulled on the gig economy?

25 July 2018

Pimlico Plumbers’ case raises questions about how employment status is defined, while employers need to be mindful when dealing with sickness absence for employees with disabilities. Read more...

Tax: 'Free' wine and VAT liability

Tax: 'Free' wine and VAT liability

25 July 2018

An M&S meal deal trips up over VAT, a guide to reporting on corporate interest restriction rules, and advice around paying family members for work. Read more...

Have your say

comments powered by Disqus

Advertisements