The role of corporate governance in preventing or minimising fraud

  • Small business brought to its knees by alleged fraud.
  • This case highlights governance issues where an organisation is heavily reliant on very few for decision-making and approval.
  • This article provides important takeaways for good governance practices.

A recent matter in which Richard Gordon MacKenzie was committed to stand trial on charges of fraud and theft related to the alleged manner in which the defendant ran a small business, Commercial Property Cleaners, which had seen one of its directors pass away and the remaining director unavailable due to injuries and a mental breakdown.

The allegations include that MacKenzie, the former CEO of the company, among other things, increased his pay from $10,000 to $25,000 and misappropriated company monies. All told it is alleged that MacKenzie stole in excess of $3.3 million and brought the business to its knees.

This case raises some important questions about the role a strong corporate governance model can play in the prevention of fraud.

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