Preventing Rogue Employees Circumventing the Board

by Carol Pocklington

Corporate boards can drive process to minimize rogue employees

Does your business have the governance structure in place to deal with a rogue employee? If you haven't, then dealing with the fallout and getting the organization back on track and refocused on business will be slow and painful.

No longer is the outlier employee just the one kicking against management, stealing corporate intellectual property or actual property. Its the one destroying the company reputation on social media. Its the one sitting at home and trashing individual executives reputation using inappropriate language. Its the one setting up unauthorized and potentially damaging hashtags.

Those people responsible for the oversight of governance in your organization must be across every area where rogue employees can find a destructive playground.

Generally, its the board that has overall responsibility for oversight of the company being governed. Therefore, its important to make sure board members are empowered to take such responsibility and that they have the credibility to so. The board structure itself is important for achieving the goal.

Further, the information flows cannot be blocked by the CEO and executive team as that itself is a problem. The board needs to know whats going on; in fact, they have an obligation to know.

Once the structure is there, find out where the board members draw the proverbial line in the sand in terms of behavior, both in the workplace and in their personal life. Establish their ability to identify potential fires in the business and understand if they have the skills to extinguish them. Ensure they ask the right questions of business executives.

Experienced board members intuitively know when information is being withheld or massaged. Still, there should be checks and balances so that heading off your companys next potential crisis is not left solely to intuition.

The more the board members understand the strengths and behaviors they bring to their own roles, the better able they will be to ensure there is a robust strategy in place to handle rogue behavior.

You see, potentially 5 percent of your workforce includes employees that are a high-security risk. The cost of all types of fraud is a staggering 5 percent of turnover, per the 2014 Global Fraud Study by the Association of Certified Fraud Examiners (ACFE.) So, what’s the cost of rogue employee behavior to your business?

Simply identifying the personality type most likely to cross the line and the triggers that push them there could save you big dollars and your reputation. Or better yet, how do you help an employee to align their strengths to a given role and avoid rogue behavior altogether?

While larger businesses are investing more in cyber security and other monitoring programs, virtually nothing is being put toward identifying and monitoring costly employee behavior risks. The problem is that many of these insider threats are already in your business and the situation is gaining momentum without anyone being the wiser. The Global State of Information Security Survey 2015 recommends that 23 percent of the annual spend on business security should be directed to behavioral profiling and monitoring of employees.

Research also shows these problems are caused by human behavior:

• Combinations of human behavioral factor outliers and external environmental factors (e.g. financial difficulty) trigger emotions causing negative behavior toward the company.
• Combinations of employees with too similar or too different styles working in a high-risk environment cause internal control issues.

A key part of the solution could be the deployment of a validated personality discovery process, providing insights to hidden, hard-wired traits and a reliable prediction of where security or compliance risks exist.

Based on external research, employees with certain measurable behavioral traits are more likely to engage in rogue behavior when emotionally triggered:

1. Innovative -bright mind, which turns into curious and devious thinking.
2. Ambitious – desire for success, leading to cutting corners.
3. Secretive – working under cover and not revealing key information.

The reality is that any person with a weak or temporarily broken character in the wrong team or facing external pressure can make flawed decisions, thus becoming the source of costly negative behavior. The employee behavior review using personality assessment should be uniformly applied to every employee in the business from the top down in order to distill the hot spot areas.

No one should be exempt from these assessments, whether they are new hires or part of the old guard. Include high-performing leaders down through the sales and operations teams to the disgruntled bookkeeper and, yes, board members.

Using behavioral insights, management can dynamically match employees with specific environmental conditions to determine their potential response. They can also discern the degree to which such responses could create rogue behavior and negative actions toward the business. Management can even apply these insights toward talent re-allocation, employee evaluation, team development and improved hiring.

Understanding behaviors and inter-relationships is not a soft area, unworthy of investment. On the contrary, it could be the key to delivering high-quality governance in any organization. Behavioral insights paired with oversight processes and procedures can and will deliver ongoing performance minimizes or eliminates breeding grounds for rogue behavior.

To learn more, please speak with one of our DNA Behavior Specialists (LiveChat), email [email protected], or visit DNA Behavior.