After two Rochester-area construction firms alleged that former controllers had embezzled company funds, the Rochester Business Journal's Kevin Oklobzija asked Brooklyn Advisors founder John Collins what business owners should take from it.
Collins, a former CEO and Vistage chair, framed it as a governance question rather than a story about one dishonest employee. His first questions were what policy wasn't followed and what procedure was bypassed. He said the same thing could happen at any company, and that many smaller businesses either have no financial policies or have them and don't do the work of managing them.
His advice: don't rely only on your own people or your own eyes. Have an outside entity review the numbers, whether that is a board, an independent CPA who reviews the books each month before they close, or both. For many CEOs of smaller firms, building those processes isn't a natural strength, which is where peer advisory groups can help, both with setting up checks and balances and with working through what went wrong when a system fails.
It is the same point behind OCTET, Brooklyn Advisors' CEO peer advisory groups: smaller companies without a board need an outside perspective on the basics before something breaks. We also wrote about the story in Commentary: Missing or Ignored Financial Procedures Are a Governance Problem.
This article was written and published independently by the Rochester Business Journal. Brooklyn Advisors did not commission or sponsor the coverage.
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