Simplified Laws Guide to Taxation and Legal Concern
One of our clients is having this problem. He has developed a very cordial relationship with his deputy. The deputy is working in his organization for the last 15 years. So, a great amount of trust is built between them.
The trust has turned into blind faith. Is blind faith in business a good idea?
Not really. Business decisions have to be taken based on evidence, not just on face value.
In the above case, the deputy is taking complete advantage of ‘blind faith’ and my client is reasonably convinced about the misappropriation of funds. The relationship is holding him back from asking certain ‘straight questions and hence he is ‘swallowing the facts’
This draws a point – The procedure and systems in the company
It doesn’t matter who your deputy or manager is. The organization has to run on principles, procedures and systems.
That’s why the initial days of the company are very crucial. It is better to draw the organizational policies and systems before you build the ‘relationships’. Once you build relationship it is very difficult to bring in new rules and regulations.
Secondly, the systems should never be compromised even in rare situations. Once you show the people that short cuts are possible, they will take advantage of it. So, be straight forward in all your actions.
Keep check and balance system in place. Its okay that your deputy can take decisions, but someone else in the organization should also authorize such moves. If this kind of policy is in place from the beginning, even your deputy may not feel bad.
Don’t allow your deputy to draw cash/money from the system on adhoc basis. In case you want to do so, make sure that each transaction is concluded with proper documentation within a reasonable period of time. If you allow these ‘suspense’ withdrawals to accumulate, it will turn to be a mountain of confusion. You will surely pay for your poor management skills.
Talk to your auditors, lawyers, consultants once in a while. Maybe, you would have authorized your deputy to handle the cases and correspond with them, but your involvement will help you to understand the reality. The auditors and consultants may reveal some ‘eye opener’ facts!
Keep a watch on the assets done by your deputy. If you notice disproportionate assets being done, it is a time to raise the red flag. Suddenly if your deputy comes up with ‘my ancestral property is sold’ ‘my wife got huge bonuses, ‘the old property which I purchased loooong back is sold for hefty money’ be alert and look out for the clues of misappropriation.
Hello Owners – be wise!
Thought for the day
The most important thing in communication is hearing what isn’t being said. The art of reading between the lines is a lifelong quest of the wise.
