November 24, 2024 by Mike Manazir – (4-5 minutes)

The Brick Chronicles: A Conflict of Interest Shakes the Foundation

Sarah Thompson, CEO of Baxter’s Bricks received an urgent email from Rick Nelson, her COO.

Subject: Immediate Issue – Conflict of Interest

Rick didn’t mince words when he walked into her office moments later, his face set in frustration. “Sarah, we have a serious problem. Mark, one of our project leads, has been awarding contracts to his cousin’s company without disclosure. The invoices are above market rates, and it’s costing us a lot of money.”

Sarah’s expression turned hard. “So, Mark’s using his position here to funnel work to family without telling anyone?”

Rick nodded “To make matters worse, there’s talk of possible kickbacks.”

Sarah took a deep breath, her frustration simmering beneath her composed exterior. “Alright, get Robert from HR and Carla from Legal. They’ll need to dive into this, and if there’s any truth to the kickback rumor, Mark’s out.”

The Investigation Unfolds

Robert and Carla wasted no time. Robert combed through vendor records while Carla quietly reached out to key contacts, checking for any hint of extra payments.

A few tense days later, Carla returned with good news. “No evidence of kickbacks. Mark wasn’t taking money under the table; he just didn’t disclose his cousin’s involvement. We’ll keep him on, but he’ll get a formal warning.”

Sarah let out a sigh of relief. “Alright, but please make sure he understands one more slip, and he’s out.”

The Plan of Action

With Mark’s situation handled, Robert and Carla got to work on a strategy to prevent future issues.

1. Annual Conflict of Interest Disclosures: Robert introduced mandatory forms requiring employees to list family connections and outside interests. “Transparency is the new rule,” he told the team.

2. Enhanced Vendor Screening: Carla added a layer to the vendor approval process, mandating that new vendors connected to employees receive HR and Legal review. “No more secret cousins,” she quipped, earning a laugh.

3. Quarterly Conflict-of-Interest Training: “We’ll hold quarterly sessions with clear examples,” Robert explained, “so no one’s left guessing.”

4. Anonymous Reporting System: Carla introduced a whistleblower hotline, saying, “People need to feel safe reporting issues without fear.”

Leadership in Action

Sarah and Rick kept an eye on the progress, trusting Robert and Carla to handle the details. Rick checked in with her during a leadership meeting, his tone more relaxed.

“How’s the cleanup going?” she asked. Rick smiled. “Robert and Carla have it covered. Marks on notice, and our ‘no cousins’ policy is firmly in place. I think we’re cousin-proof now.”

The Ripple Effect

With new protocols in place, transparency became the new norm at Baxter’s Bricks. Employees appreciated the clarity, and the quarterly training sessions even became popular, thanks to Robert’s humor. At one session, Kelly, a longtime engineer, joked, “Guess my cousin’s BBQ stand won’t cater our next event?”

Everyone laughed, but the message was clear: Baxter’s Bricks was serious about integrity.

The Lesson

At their next leadership check-in, Rick confirmed, “Mark’s gotten the message, and the team’s onboard with the new policies.”

Sarah nodded, satisfied. “Good. Conflicts of interest are cracks in the foundation. If everyone’s clear, we stay rock solid.”

Takeaway

When a serious conflict of interest arose, Sarah empowered her HR and Legal team to tackle it. New policies and regular training reinforced transparency and trust at Baxter’s Bricks. Great leadership means trusting the right people to protect the foundation.

“In looking for people to hire, you look for three qualities: integrity, intelligence, and energy.
And if they don’t have the first, the other two will kill you.”

-Warren Buffett

Lead from your heart. Lead to Win.

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