Many tax, treasury, accounting and compliance functions within a company are carried out behind the scenes. C-suite leaders might be unaware of them as long as those activities perk along without causing major problems. In many companies, unclaimed property is one of those kinds of functions. However, with enforcement increasing and the number of audits rising, it might be time to think about getting your organization’s C-suite involved. Doing so can be easier said than done. This blog includes tips for approaching leaders, explaining the importance of unclaimed property and garnering their support.
Why does the C-suite need to know about unclaimed property?
In some cases, they probably don’t need to know the intricate details. You might only need to get top leaders involved when there is some impending major financial impact or potential erosion of the company’s reputation. That doesn’t mean you should wait until the organization has been notified of an audit or fraud has been uncovered to get leaders involved. You also should include them when it’s mandated by law (e.g., under the terms of Sarbanes-Oxley) or if you can’t get resources you need to protect your organization.
For example, if you have discovered your company has gaps in escheatment for the past decade or your compliance officer leaves the company and you discover records have not been maintained correctly, those are issues your leaders need to know about before they become serious.
The news has covered an alarming number of cases in which companies have experienced serious damages due to unclaimed property. These examples can help demonstrate potential risks. In 1999, Bankers Trust tried to cover up actions of several executives and employees who diverted more than $19 million in potentially escheatable property to enhance performance and qualify for bonuses. The result of their indiscretion was more than $63 million in fines. Look for other examples involving Online Resources Corp., Bally Total Fitness, Bank of America and others.
Even with those examples, you might find the issues you believe are potentially serious are not taken seriously by your leaders. They might think of unclaimed property as a non-issue, or they might have more pressing concerns. Even if they are aware of the potential exposure to unclaimed property risks, they might be inclined to ignore them and hope they go away.
If you are the person in your company who has been charged with responsibility for unclaimed property, getting leaders to listen is part of that responsibility. You need their approval to take action, to allocate funds for unclaimed property services, and to support changes throughout the company to modify processes.
How to approach your C-suite and get support for unclaimed property management
If you think of this from the perspective of your CEO, CFO or other C-suite executive, you’ll understand what you can do to gain their support. They are interested in the well-being of the entire organization. They’re looking for individuals who can bring solutions to the table to help solve those problems. They might not have time to learn about and understand these complex issues.
Taking into consideration your leaders’ needs, the following suggestions will help you gain their support:
- Find a champion to help get the message to the C-suite. Make sure your champion is well informed and armed with facts.
- Translate concerns into a company-wide perspective the C-suite can understand. How does this relate to company strategy? Put it in terms of money and reputation.
- Get the facts in order. Keep your presentation simple, direct and in an easy-to-digest format. Clearly articulate potential risks and quantify financial considerations.
- Avoid taking an alarmist approach. Stay level-headed and focused on solutions. Come to the table with a plan and a timetable for implementation.
- Carefully evaluate all options, including outsourcing. Spell out recommendations, support them with facts, and tell C-suite executives exactly what you need from them.
- Be prepared to take action and follow through when you get the green light.
In many ways, your communication with the C-suite is as much a benefit for them as it is for you. It keeps them from being blindsided by bigger problems, as the leaders of Bankers Trust were. It helps your leaders act responsibly to protect the organization and gives them confidence things are perking along behind the scenes the way they should be.