Date Published: 
02/21/2012

What do Olympus, Nortel and Ornge have in common?  ‎

Olympus is a Japanese camera maker that is accused of falsifying its books, ‎hiding losses, and covering it up with complex unrelated transactions.  ‎

Nortel is the now-defunct Canadian telecommunications manufacturer whose ‎top executives are on trial, accused of rigging the books to trigger executive and ‎management bonuses.  ‎

Ornge is the Ontario Air Ambulance Service in which paramedics transport ‎urgently ill or injured patients to their destination, often from remote locations.  ‎It is embroiled in a scandal, written about elsewhere here, where public funds ‎was allegedly used to create private for profit entities benefitting a few senior ‎executives.  The Ontario Provincial Police have been asked by the government ‎to investigate.  ‎

In each case, different though they are, a common thread arises about the ‎quality of oversight. These are cases where in the executive ranks something ‎got in the way of good judgement, and no one else seems to have been looking ‎in the right place to see it.

 

Risk Management Perspective: 

The oversight question is complex, touching on having the right incentives to do ‎the right thing, protecting whistleblowers (a former CEO in the case of ‎Olympus), and the Board having enough distance from the CEO and executive ‎team to ensure that the management team understands and appreciates ‎intuitively that not only is the oversight real and present, it will have teeth.  ‎These are (or were) top-notch name brand organizations – at one level it is ‎terrible shame that their former leaders are embroiled in criminal proceedings, ‎and at another level. ‎

 

Industry Group: 
Other
Industry: 
Other
Country: 
Canada
Risk Class: 
Strategic
Risk Type: 
Board Risk Processes
Risk Type: 
Leader Risks

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