Whistleblowing’s Renaissance

Richard Young

The potency of the hashtag #MeToo may have passed its zenith, but “paradigm shift” is still entirely accurate when it comes to the way the movement changed the ethics landscape for every organization.

This shift is most visible in efforts to eliminate sexual harassment in the workplace, of course, effectively putting employers, managers and leaders on notice. But #MeToo’s seismic effects are founded on another shift: people are increasingly motivated to speak out. Blowing the whistle is now very much part of the corporate landscape. And the canvass is much broader than workplace sexual harassment.

#MeToo’s seismic effects are founded on another shift: people are increasingly motivated to speak out.

Take, for example, the much-publicized case of Tyler Schultz, grandson of the former Cabinet Secretary George Schultz, and the whistleblower at the heart of the collapse of diagnostics firm Theranos.

This was a business built on little more than ambition, but had attracted vast amounts of investors’ money and patients’ trust. Schulz’s revelations to the Wall Street Journal, which CEO Elizabeth Holmes claimed were in contravention of his contract, brought down the business. (When it comes to reputational risk, this is what is considered a worst-case scenario.)

This was not recklessness. Schulz had tried everything in his power to alert both management and the board to the fundamental flaws at the heart of Theranos. Ultimately his decision to go public, a critical one for shareholders and patients alike, was simply a case of feeling no other avenue was open to him.

Learning the Truth Means Protecting Those Who Tell It

Jason Zuckerman – who styles himself the #WhistleBlowerLawyer – thinks the Theranos board should be held accountable for more than just failures of oversight and outright deception. “They should also be held liable for ignoring whistleblowers’ well-founded disclosures and paying David Boies to bring frivolous suits to silence whistleblowers,” he tweeted.

Ignoring – much less silencing – whistleblowers is starting to look like one of the worst breaches of ethics in the modern compliance landscape.

That sentiment is starting to gain ground more widely. As they say about political scandals dating back to Watergate, “it’s not the crime, it’s the cover-up.” Ignoring – much less silencing – whistleblowers is starting to look like one of the worst breaches of ethics in the modern compliance landscape.

Master Class Webinar: Retaliation: Navigating Federal Statutes

Of course, whistleblowing in politics has never gone away. The current polarization of opinion is inciting more division among people, groups and parties – and pushing organizations into a “win at all costs” mentality. And when wrongdoing is exposed, the vulnerability embedded into the whistleblower’s journey is still evident.

Campaign worker Shahmir Sanni blew the whistle on overspending that breached electoral rules – and was subsequently outed as gay by a campaign staffer. “I’m still navigating that trauma,” he told The Guardian last year. “Like most whistleblowers, the trauma that we face is incomparable. Because we knowingly give up everything.”

It’s a reminder that even with adequate legal protections for whistleblowers, they face incredible personal risks from speaking out. In a corporate context, that means having both reporting channels and case handling capabilities that create a supportive environment. One panelist at the NAVEX Global whistleblowing round table in London earlier this year explained how that works for his organization:

“We take a victim-focused approach – they’re the number one priority. If they don’t want to make a formal statement, that’s their call. And remember, a team of people in some specific location might only be four or five strong. If someone feels they need to report something with that kind of proximity, it’s hard to manage the need for detail while protecting the individual blowing the whistle, the organization and the accused.”

Read More: EU Commission Approves New Whistleblower Protections

Preparing the Ground

That creates fresh workload for compliance teams, too. As another panelist at the NAVEX Global debate in London put it, “the most enlightened organizations are also the ones most able to kick off and execute an effective investigation because they’ve already planned for it. And within the organization, people know their process isn’t about tying things off – it’s about bringing problematic issues to a resolution quickly and appropriately.”

Remember, this isn’t about getting ahead of a bad news story. (Although the reality is that many senior leaders will highly prize that aspect of whistleblowing structures you have in place.) It’s about uncovering issues in the organization that could cause it to underperform – both in regard to its employees and to its stakeholders.

The evidence of whistleblower hotline’s contribution to the bottom has become more empirical recently as academics correlated hotline usages with company performance. As published in the Harvard Business Review: “whistleblowers are crucial to keeping firms healthy and that functioning internal hotlines are of paramount importance to business goals including profitability.”

A sexist boss, someone massaging their expenses, a defective product or a culture of excessive discounting for certain clients are all behaviors that will not only bring a business into disrepute and attract the attention of regulators – they’re also signs of deeper cultural or operational problems that must be addressed.

Whistleblowers have always been proverbial “canaries in the coal-mine” for organizational health.

The compliance industry stands at the intersection of speak-up movements and organizations’ desire for self-improvement. We know that whistleblowers have always been proverbial “canaries in the coal-mine” for organizational health. By actively encouraging open and honest conversations with their employees, organizations can foster the trust and investment critical to building strong cultures and lasting profitability.

White Paper: The ROI of Compliance Program Hotline Reporting


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