Watch the documentary on PBS Frontline: Black Money (https://www.pbs.org/video/frontline-black-money/) It's available for free :). Your task will be to write up a question like the example below. Please be detailed. This question will be posted to generate discussion within the class.
A Lack of Due Diligence and False Sense of Ethical Culture and Integrity At 0:24 in the video, it's stated that Epticom was a "seemingly responsible ethically run company nearly invisible to regulators". It became quickly evident however that Epticom embraced an "out of sight, out of mind" mentality when it came to embracing compliance and a culture of integrity, which was highly exposed by several of the events that occurred. At 2:45, it's reiterated that regulatory compliance has never been an issue at the company, therefore why should they change anything, especially given that Jack says they don't have the resources to establish a separate compliance organization. A quick decision was made despite concerns being raised, and it feels as if the organization had a false sense of integrity. As referenced in Unit 5, developing a culture of integrity requires engagement of your employees and implementing leadership qualities that encourage stewardship and meaningful relationships. In examining the four drivers of ethical cultures, it is clear that Epticom ended up lacking qualities that led to missteps and caused their demise. Where do you feel the cultural design of the organization was flawed? What elements were missing? I believe that respect and trust existed amongst the team, which is a big reason why they felt comfortable hiring John Kim with minimal due diligence. For instance, at 2:15 when Vanessa expresses her reservations and recommendations about the shift in strategy, she ends up backing off because she and the team all respect and believe in Jack's strong track record. With that said, a lack of due diligence and the failure to listen carefully to others' opinions caused the team to rush into the hire of John. This individual and his partner brought forth a culture that lacked honesty, another driver of ethical culture that was not present especially once John began running the Asian operations. Furthermore, Jack Hampton's tone coming from the top pressured other key personnel to overlook and ignore their gut feelings. In several instances management expressed that the expansion felt rushed, the strategy was unclear and the financials were suspicious, and it took far too long for them to take action on perceived misconduct. By failing to challenge the hiring because the directive came from Jack who was blinded by his desire to become CEO of an even larger corporation, they essentially left themselves with only one line of defense; a small audit team. There was no line of defense at the business level, as John Kim was going rogue. Jack and the board refused to fund a formal CCO role and therefore the few employees who were concerned had no avenue to pursue without being skirted by Jack. They had an absolute need for a separate compliance function that could operate independently and properly provide due diligence which could have also allowed employees to feel more empowered to speak up and take action rather than give way to Jack and the couple individuals he was able to persuade to support his decisions
