When the Boardroom Becomes a Toy Box: The Cost of Blindfolded Leadership

​In a story that reads more like a screenplay than a financial audit, the Detroit Riverfront Conservancy’s former CFO embezzled over $40 million, and did so over a decade without being detected by anyone tasked with safeguarding the organization’s resources.

While the crime itself was astonishing, what’s more disturbing is how long it went unnoticed. For more than ten years, financial statements were manipulated, vendors were fabricated, and personal luxuries were funded, all under the radar.

This wasn’t just a failure of one individual. It was a failure of governance, accountability, and internal controls. A case study in what happens when boardrooms operate with blindfolds on.

Here’s what every organization should take away from this:

1. Internal Controls Are Not Optional

If one person can move $40 million without detection, your systems are either broken or nonexistent. Segregation of duties, mandatory approvals, routine audits, and independent oversight must be more than box-checking exercises.

Yes, it’s harder in smaller organizations with only 1–2 finance staff, but not impossible.

2. The Board Is Not a Bystander

Board members have a fiduciary duty of care and loyalty. That means understanding the numbers, asking uncomfortable questions, and not outsourcing financial literacy to the one person holding the purse strings.

Consider annual board training to reinforce fiduciary responsibilities and sharpen financial fluency.

3. Ethics Without Accountability Is Just Talk

Culture is set at the top. If leadership doesn’t follow its own policies, why would anyone else believe in them? Even the strongest mission can’t stand without mechanisms to back it up.

Take a hard look at your reporting process:

• Do employees know where to go?
• Does the contact have a close (or familial) relationship with the person in power?

If yes, change it. Period.

4. Whistleblowers Are Early Warning Systems

Was there anyone who saw red flags and stayed silent? Or someone who spoke up and was ignored?

Build safe, anonymous reporting mechanisms, and when someone flags an issue, respond.  (And yes, I shouldn’t have to say this, but … respond without retaliation.)

Use third-party hotlines. Conduct regular culture checks. Reward ethical decision-making, even when it’s inconvenient.

What This Means for Your Organization

If you’re operating under the assumption that “our CFO would never” or “we’d catch it,” now is the time to validate that belief with facts.  A truly ethical finance leader won’t be threatened by strong controls, they will see them as protection for the organization and a safeguard for their own integrity.

As a strategic finance leader, I help organizations build systems that ensure financial clarity, control, and confidence, without unnecessary complexity.

If your board, executive team, or finance team isn’t sure where the cracks might be, now is the time to find out, before someone else does.

Let’s remove the blindfolds.