I am not the chief executive officer, but other middle-level managers and I have reason to believe the chief financial officer has been double-dealing with contracts with third parties and skimming profits. How should we out this conduct and illegal behavior? We do not want to jeopardize our jobs or give the CFO the ability to slip out of criminal prosecution. We also want to protect our organization’s reputation.
You and other middle-level managers who have knowledge and evidence of wrongdoing by the CFO have a right and likely a duty to report what you know to the CEO.
The CEO will have the power to investigate based on advice from your general counsel and the board of directors. They will then decide how to confront the CFO. That might entail terminating the CFO’s employment with the organization as well as informing governmental prosecutors of the CFO’s actions.
It would be up to the state or federal prosecutors to decide if they want to charge the CFO with a crime. The CEO and board will need a plan on when and how to respond to any public notice of the prosecution.
I would say it is premature for the mid-level managers to go public on the situation. It would be up to the CEO, with board and legal counsel input regarding how to respond if the CFO’s actions become public.
This situation must be handled with the utmost care in light of the potential harm it could cause to the reputation of the organization.
In the process of investigating the actions of the CFO, the CEO would likely retain a public relations consultant to help the facility message, and minimize the potential damage to the reputation of the senior living facility based upon the CFO’s inappropriate actions.