Intra-organisational loss rarely detected

May 2003 News

Only 20% of intra-organisational loss is on average ever detected, and of that figure, only some 20% ever gets reported to the police, says Jenny Reid, new managing director of GriffithsReid, South Africa's oldest corporate security management company.

"This is a staggering figure when one considers that white collar crime in South Africa alone costs over R40 billion a year," says Reid, who was speaking at a business breakfast in Johannesburg to launch the revamped GrifithsReid corporate profile and her appointment as MD.

"When one considers that the security industry in this country spends some R14 billion a year, with 55% of that going on the guarding industry alone, then companies have the right to demand a high standard of service from the industry," she says.

According to a recent report on intra-organisational crime, most losses in companies occur from asset misappropriation (61%), with computer related crime (51%) and corruption (50%) all ranking ahead of organised crime (35%) or financial statement fraud (21%).

"In addition, there are a number of new risks of which companies have to be aware," continues Reid. Some 99% of companies do not have policies regulating employee communications, "yet this can be one of the biggest abuse sectors with the rise of the Internet.

"According to a recent Ernst & Young report, some 85% of the worst frauds were committed by employees themselves, with 55% coming from management ranks with less than one year's service."

Incredibly, Reid adds, some 38% of all companies surveyed had 'never' run a fraud prevention programme, and 11% last had one a year ago. "It is a myth that the more one pays for security, the better the service.

"The reality is that putting a guard at the gate is only one part of a holistic security solution. There are many other factors, such as addressing employee behaviour, ensuring that technological security measures are backed up by competent staff, and that guarding companies are subjected to impartial management which ensures they deliver all the promised services to standard.

"A proactive security solution is therefore an investment in a company's bottom line," Reid says. "Through proactive measures, security need not be an expense, but in fact an asset which saves the company money."

For more information, contact Jenny Reid, GriffithsReid, 011 786 8556.

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