Trésorier/Treasurer magazine - N°91 - Oct/Nov/Dec 2015 - (Page 29)

FORUM HOW CAN TREASURY MANAGEMENT DEPARTMENTS EFFECTIVELY COMBAT "CEO IMPERSONATION"? In a way, the company as a whole can by protected by placing importance on its corporate governance. A corporate world can prove hostile Companies have to face a large number of threats; besides those of corruption and cybercrime, cases of fraud involving the impersonation of the CEO have shown an upward trend. Since 2006, a few hundred of French companies have dared confess to being victims of this kind of scam. The losses suffered by corporates are estimated to be over €400 million. The impact can be substantial and that it is of paramount importance to protect oneself. In total, 77% of companies state that they have suffered at least one attempted fraud over the last 12 months of business activity; meanwhile, 20% failed to prevent all such attempts1. However, there are measures for thwarting these attempts. A reliable information system should be implemented alongside steady internal control mechanisms. For this, the assistance of the Legal Department is crucial because the implementation of such mechanisms requires a structured legal framework in order to reduce risks and provide the best solutions to managers without any expensive slowdown in the company's activities. What is "CEO impersonation"? What methods are used by the con artists? What should we do when dealing with potentially fraudulent activity? These questions must be addressed by the whole company so as to be fully informed and aware of such fraud. In fact, human intervention, often coupled with internal control mechanisms, is the reason for over 80% of all fraud prevention1. Therefore, it is essential that secure internal procedures are adopted and that any urgent demand not respecting these procedures is carefully examined. The Financial Departments of subsidiaries ought to be the first to have their attention drawn to this threat because they are generally targeted the most, given their direct relationship with the banks and their geographical remoteness from the Executive management. Moreover, it has proven to be just as necessary to sort the information according to the business, adopt a governance of information system identifying the most sensitive data and ensure limited publication of such information. - OCT The control of information as the first line of defence against fraud N°91 A reliable information system should be implemented alongside steady internal control mechanisms. - In an increasingly complex, digital and globalised business world, large groups and SMEs must face new challenges inherent in organisational, legal and financial constraints, which can curb or hinder the smooth functioning of their business. With this in mind, developing Corporate governance best practices becomes essential to ensure an efficient and sustainable business that creates value and is adapted to all its stakeholders. At the same time, it fosters the compliance and consistency with changes in regulations and internal statutory as well as ethical principles. Urgent wire transfers, changes to the bank account details of suppliers, fake payment orders, there are various methods but the scam usually begins with identity fraud. Believing that the instructions are from upper management and pressured to act quickly and confidentially, the employee carries out the ordered transaction, oblivious to the deception, and unwittingly assists in the theft of thousands or even millions of euros. Worse still, in the rare cases where the fraud is foiled, some scammers impersonate the fraud squad and call the actual group CEO and request that the bank transfer be carried out in order to "help trap the scammers"! LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE Corporate governance providing universal protection / NOV / DEC 2015 "CEO impersonation" is a real threat for companies. How can fraud be recognised and thwarted? How can Treasury management Departments foil these attempts by means of controlled management of Delegation of Authority? 1 . Source: Euler Hermes 29

Table of Contents for the Digital Edition of Trésorier/Treasurer magazine - N°91 - Oct/Nov/Dec 2015

Table of contents
INTERVIEW Ben Poole Editorial Services
To What Extent Should Treasurers’ Activities be further centralized?
Capital Markets Union (CMU)
Upsurge in fraud
CEO impersonation
Using analytics to cope with uncertainty and volatility for treasury
IFRS 9 : Nécessite d’une reorganisation bancaire majeure
Taux zéro : de nouvelles stratégies pour un nouveau monde
Investing surplus cash in repos
Warranty & indemnity insurance
Making the switch from Excel to a Treasury System
Corporate treasury in the digital age
Fini le casse-tête des paiements internationaux pour les entreprises !
Bank Independent Cash Pooling
Gérer l’offre de retraites : un choix complexe pour l’entreprise

Trésorier/Treasurer magazine - N°91 - Oct/Nov/Dec 2015