Dorothy Crenshaw February 19, 2020 | 03:38:56

Corporate Reputation And The Whistleblower Culture

As a PR person, I’ve always been fascinated by the complicated psychology of whistleblowing. Lately it seems particularly relevant. Tom Mueller, who interviewed over 200 corporate whistleblowers for his book Crisis of Conscience: Whistleblowing in an Age of Fraud, proclaims this “the age of the whistleblower.”

Look at Theranos – the health tech unicorn that crashed and burned just two years ago. Its implosion was in large part due to first-rate reporting by The Wall Street Journal‘s John Carreyrou, yet Carreyrou was originally tipped off to irregularities by a company insider. Just two months ago, luggage company Away grappled with reputation stumbles after employees shared internal messages that unpacked a punitive workplace culture.

But the most far-reaching recent example is that of Susan Fowler. Her new memoir, Whistleblower, recounts the events that drove her to document the harassment and toxicity she experienced in the now-legendary blog post about her “very, very strange year at Uber.”

So, what’s behind the whistleblowing trend, and what does it mean?

A mixed legacy

The best outcome from Fowler’s experience, and those who endured similar treatment, would be what Stephen Levy of Wired calls “the end of the high-performer defense.” In many companies, especially high-growth technology businesses, there have been different standards of behavior for certain employees. When Fowler originally complained to Uber’s HR department about inappropriate overtures from her manager, her experience was dismissed because the manager was, you guessed it, a “high performer.” Since the Fowler memo, Big Tech players like Uber and Google will think twice about excusing inexcusable behavior or implicitly rewarding it with rich exit packages even when the bad actors are let go.

Yet Fowler’s experience is a cautionary tale. Sure, she landed on the cover of Time and she’s now an opinion editor at The New York Times. Her memoir will be made into a movie. Things have worked out fine for her; in fact, a cynic might say she’s better off after what happened. But as she tells it, the consequences of her disclosure were scarier than anything most of us could imagine. She has been threatened, smeared, investigated, and shunned by people who know better. For an even uglier example, just look at the rancor toward the (officially) unnamed individual whose report ultimately triggered the impeachment of the president. There is no guarantee of protection for any whistleblower.

When culture is a barrier

Blowing the whistle sends a chill through an organization. What’s more, a strong corporate culture, rightly prized by high-growth organizations, can inhibit healthy disclosure of wrongdoing. Exposure of unethical activities can have bad repercussions for lots of employees, not just those directly involved. Rarely does a whistleblower story involve just one individual. There are those who actively participated as well as those who knew or should have known. Often there are employees who received complaints directly or who heard about them. Where does accountability begin and end? Then there are those responsible for risk-management processes that failed. Finally, there are negative consequences for employees who weren’t involved at all – from cocktail-party shame to staff layoffs.

The key, of course, is for senior managers to model ethical behavior, and to cultivate an environment of full transparency. That’s easier said than done.

A red flag about institutions

In an essay about the most famous whistleblower of all time, Edward Snowden, Jill Lepore reminds us that the prevalence of whistleblowing today isn’t a good sign. It’s a red flag. It means that systems are failing. It’s an “indictment of an entire system of accountability.” Lepore writes, “Businesses have regulations, compliance departments, and inspections. Whistle-blowing is necessary when these safeguards fail.”

So what can businesses do to protect themselves, and what can we do as a culture?

A striking commonality among whistleblowers is their persistence. According to the experts, most report problems or abuses to those in charge, and often repeatedly. They don’t usually turn to the press before exhausting other avenues.

Many companies launch investigations and, where warranted, negotiate compensation in exchange for an NDA signed by the injured party. But NDAs don’t solve the cultural problem, and lately, they don’t even ensure confidentiality. Stories about NDAs often leak, even when the details stay private. It’s not a good look – just ask WeWork or Bloomberg LP. Employers should be focused on proactive action to prevent unethical behavior in the workplace rather than taking a reactive approach that can backfire.

Like any other risk management tool, a whistleblower policy is only as good as its practice. It must send a message to stakeholders that the organization is committed to rooting out illegal or unethical behavior, and that retaliation will not be tolerated. In some cases, outsourcing is part of the answer. Anonymity helps, of course. If complainants can make reports anonymously to an outside firm, it allows for more objective reporting and the chance to correct wrongdoing without public exposure. The only cure for the epidemic of whistleblowing may be more of it.

Any crisis manager knows that it’s easier to prevent a reputation crisis than to clean it up after the fact. The same is true for a whistleblower policy. A business should encourage whistleblowing within its walls, because the consequences of not doing so will be far worse. The internal and external mantra needs to be: If you see something, say something.

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