When is an employee stealing? When he or she takes a pad of paper? What about making copies for a child’s school project? Or ordering holiday gifts online at work? Those thorny questions were posed to a group of 40 family business owners and students at the latest morning seminar hosted by the Family Business Center at California State University Northridge. The Nov. 16 event featured an examination of employee dishonesty and internal theft by two executives from the Sherman Oaks insurance company Hoffman Brown Co., Steven Brown and Michael L. Friedman. Brown said the issues touch every business, even small and family-owned ones with close-knit staff members. “We would think the real risk is from the outside,” he said. “But the truth is half of all loses come from within. The inventory’s walking out the door.” The problem usually is that businesses don’t set a standard on what constitutes stealing outside of what’s flagrant: embezzling cash from the till, stealing large machinery or creating fake vendors and paying them. Often left unsaid, however, are smaller issues, such as Internet and office supply policies. Employers have to set the boundaries, Brown said. “When are you going to draw the line?” he said. “You have to draw one sometime because subjective management doesn’t work.” At the same time, companies family businesses need to stop problems before they occur, Friedman said. One way is by monitoring workers for not only suspicious activities, but also to find out whether someone has hit a rough patch or is having trouble at home, making them more prone to steal. Workers that feel spite towards a company, such as for not receiving a raise or not being recognized for hard work, might also feel compelled to take money from the company, Freidman said. Finding out early may help a business curtail the losses, he said. “You need to know your employees,” he said. Even with the precautions, though, it’s important to acknowledge that thefts will happen in all businesses, Brown said. Family Matters The CSUN Family Business Center has scheduled these monthly seminars discussing issues of interest to family businesses: Saturday, Jan. 20 Winter Mixer Thursday, Feb. 15 Contracts with Government Agencies Thursday, March 15 Tax and Accounting Thursday, April 19 Succession Planning Thursday, May 17 Financing Your Family Business For more information, call (818) 677-2438 or visit csun.edu/fbc.
