July 28, 2011

Ethics and Compliance Expert Illustrates Work of Corporate Ombuds

The latest issue of the Corporate Crime Reporter features an interview with Patrick Gnazzo, an attorney who has held a variety of executive positions, including as the former chief compliance officer at Computer Associates. Gnazzo says that the optimum set up for a corporation is "a strong ethics and compliance office and a strong ombudsman’s office." He illustrates this position with a story from his work as the chief compliance officer at United Technologies Corporation:

“This is a true story with United Technologies Corporation,” Gnazzo said. “The company had an ombuds program. And the ombuds person is a neutral. That is someone the employees can feel comfortable about going to, telling their problems to. And the neutral protects the employee’s identity.”

“In this particular instance, an administrative assistant called on the anonymous hotline and said – my boss is cheating the company. But if I tell you, I’m going to be fired, because I’m the only one who knows. He’s going to know I did it. And my career is done within the company.”

“And the ombudsman came to me and said – here’s the problem Pat. This individual wants to do the right thing. This individual wants to tell us who is doing this. But this individual is fearful for their career. I suggested that I set up a time to call back. And I explained to this person that if they told me who it was, and what they were doing, I would call for an audit of all of the vice presidents within that particular organization on their expense reports over a six month period. We would catch that particular individual and anything else that might come up.”

“That made the individual comfortable. And that is exactly what we did. We found that person and we found a couple of others that were cheating the company.”

“The company did the right thing by firing those individuals. The administrative assistant’s name never came up. And her career went on and she was never impacted.”

1 comment:

  1. An admirable person and story for me. If all companies has someone like that ombudsman, I bet all would be operating efficiently.

    It's always been a common problem among employees to fear their superiors doing unethical actions since their job is highly at risk. And having someone whom they can trust would be easier for them to work in an ideal setting.