Companies should embrace whistleblowers, not ostracize them

by Kurt Schulzke

In the corporate ethics arena, one of the most destructive tendencies is knee-jerk retaliation against whistleblowers.   Ann Kraemer argues convincingly that companies should go out of their way to encourage whistleblowing (especially the internal variety) for a variety of reasons.  Kraemer’s article, Embracing the Enemy, in the Summer 2011 Conference Board Review, offers a robust mix of theory and practical insights of notable recent whistleblowers including Sherron Watkins (Enron), Jeffrey Wigand (Brown & Williamson Tobacco), Peter Rost (Wyeth and Pfizer) and Paul Moore (HBOS). Key excerpts:

Destigmatizing whistleblowing is probably the single most effective way to get more information flowing, and the place to start is the tone at the top…Senior management creates the culture not only by what they say but also by the expression in their eyes when they say it, and by their responses to issues when only a few people are present. Employees can spot insincerity a mile away…

Watkins on corporate “best practices”:

Enron had what many consider “best practices” with regard to internal whistleblowing procedures; however, these procedures are quickly reduced to all form, no substance, when management ignores, rationalizes, or—worse—retaliates against the messenger of bad news. Most companies have wonderful procedures in place, but they are unfortunately geared toward providing an adequate defense of the company when or if an outside stakeholder investigates a problem, and not geared toward ensuring that bad news gets to the top and is dealt with appropriately.

Our experience with whistleblower clients confirms Watkins’ view: corporate procedures — and management attitudes — are almost universally geared toward circling the wagons and legal defense, not addressing the underlying misbehavior in a productive way.  If they were geared toward addressing the issues, we would have not whistleblower clients.

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