Criminal Injustice?

Critics of criminal justice in countries ranging from the United States to Korea have long complained of a glaring imbalance: white-collar criminals typically receive far greater leniency than other crooks. Could a similar inconsistency exist within companies?

A new study of economic crime suggests that it does. PricewaterhouseCoopers surveyed 5,400 companies globally and found that when corporations discover employee fraud, they deal more harshly with middle managers and lower-level employees than with their top managers. For example, they are more likely to file criminal charges when low-level employees are involved.

There's an irony here: The same study finds that the more senior the employee, the greater the damage to the business.

John Donker a PwC partner in Hong Kong, argues that such inconsistency sends the wrong message to employees. "The ethical tone in an organization is very important for dealing effectively with economic crime," he says. "If senior executives are being punished less, that's clearly a problem."