The thief and the orchestra

It is a chief executive’s worst nightmare: waking up one day to discover that your trusted finance director and general manager has been stealing money from under your nose for years. And you simply had no idea.

But that is what happened to Tim Walker, the chief executive of the London Philharmonic Orchestra, who yesterday broke his silence on the $1 million theft that shocked the British arts community last year.

He described that moment when it twigged that his trusted CFO, Cameron Poole, was stealing as the ”worst episode of his professional life”.

“What I found incredibly difficult was the emotional impact — being betrayed by someone I trusted absolutely for five and a half years,” he says in the interview with The Times.

Walker, a high profile arts administrator from Australia, described how the charming and articulate young man, also an Australian, had started siphoning off small amounts and then when was undiscovered, took greater risks.

Poole, a committed Christian who regularly attended a London church and is married to a Tory councilor, used the orchestra’s cheques and credit cards to pay for flights, jewellery, artwork and pay for an extension to his home.

The modus operandi and the way he avoided detection is very instructive – and disturbing to any CEO who thinks they have processes in place to combat employee theft.

From the start Walker felt he had hired an impressive young man, in his 20s who had a promising future. Despite being fellow Australians, Walker did not know Poole when he was recruited. Poole was introduced by a head hunting company and had strong references, having previously worked at Accenture and as a charity worker in Africa before that.

The orchestra also had processes in place to prevent employee theft, says Walker, recommended by Deloitte.

To get money from the orchestra involved four people. When an invoice landed, one person had to agree it was correct. Then the accounts clerk raised the cheque which was signed by Poole. It was then countersigned by the CEO or chairman.

But Poole invented false invoices, signed that they were correct, signed his own signature and then forged a second signature. Walker had also unwittingly given Poole access to more money by introducing a contingency fund of 10% of turnover in order to secure the orchestra’s future.

“And of course he was also preparing the reports for our auditors,” Walker says.

The theft was only discovered after Poole had resigned and the new CFO sniffed a rat.

But how did Walker himself not pick up that something was not right? He was distracted by a changing marketplace, and three annual audits failed to pick up the theft.

The money is now being recovered by seizing assets and selling his house and the orchestra also did an out of court settlement with the bank that processed the forged cheques.

Meanwhile opinion is divided between sympathy and derision for Walker as to whether he was the victim of an elaborate fraud or he simply failed in his duties as a CEO.

As any employer knows however, the reality lies somewhere inbetween. Meanwhile here is a Thief Buster checklist we published recently.

Thief buster checklist:

• Background check every new hire.
• Balance every day – and chase down reasons for not balancing.
• Track every sale back to an employee – any good point-of-sale software will let you do this.
• Respect employees and pay above base wage.
• Track cash and every point between the customer and your bank account.
• Strict refund policy requiring a form and customer ID, and your signature.
• Change your roster regularly.

Source: Mark Fletcher, Tower Systems