Brian Tora column

May 13 2003 By Bill Midgley, The Journal

It would appear that crime against business is yet again on the increase.

We have heard surprisingly little about this over recent times, in spite of the massive loss that business experiences.

Part of this may be due to the fact that the apologists for such crimes tend to dismiss it as not being "real" theft or fraud, and refer to it as victimless crime.

Such comments reflect poorly on the individuals and their unwillingness to pursue the appropriate criminals, for that is what they are. There is no such thing as a victimless crime.

While the company or the corporate body may not exactly have legs, it is still made up of individuals and it is those individuals who suffer if the company has, in turn, been made to suffer.

And yet companies often do not take a strong enough line on this kind of crime, which only serves to encourage it.

It may be considered hardly surprising that there is such an increase in levels of crime, bearing in mind the attitudes of many senior executives to their businesses. Such executives, legal as it may be, plunder shareholders' funds and company profits with the obscene salaries, bonuses and share options they award themselves.

Or it may be that such benefits are awarded by non-executive directors who in turn are encouraged by the executive directors to take a greater share of the company's funds.

The more that there is a cry for responsibility and common sense to be shown, the more we hear of yet a further group of executives who reward themselves for failure or move the goalposts to ensure that if they are not making a profit then the downsizing of an operation suddenly becomes the corporate target for the year. Inevitably, the attainment of such a target then triggers a bonus.

Corporate Governance in this country is a mess, and there seems little appetite at the present time to encourage the change that is necessary.

The Higgs Report has been challenged in far too many areas, probably because it will be seen as a curb on the activity of some of the greedier members of our senior management profession in the UK. Such executives, however, should take note.

The Government is making serious noises about the quality of Corporate Governance.

Corporate Governance and crime against companies may seem strange bed-fellows, but good practice in any area should set an example to others.

Managing directors who complain that staff help themselves to envelopes are hardly on high moral ground if they are awarding themselves salary and benefits increases way in excess of their worth.

One practice may be illegal, but both are highly dubious.