Mary Inman and Tom Mueller discuss whistleblowers and ethics in the workplace at Integrity at Work Week conference
On November 23, 2020, Constantine Cannon partner and head of the firm’s international whistleblower practice, Mary Inman, interviewed the author of “Crisis of Conscience: Whistleblowing in an Age of Fraud”, Tom Mueller, at the Integrity at Work Week conference organized by Transparency International Ireland.
The discussions started off with Tom describing common misapprehensions about whistleblowing and explaining how, with the growth of secrecy and the cult of money, insiders have the most valuable information on wrongdoings. As Mary added, there is a need to “walk the walk not just talk the talk in compliance” and corporations must understand and take integrity seriously to ensure staff who speak up are protected and heard.
When asked if whistleblowing is critical to a healthy business, Tom emphasized that it is good for companies and explained that there is abundant academic research demonstrating that, when whistleblowers report internally, they do not do it to harm the organization but they try to help it. As explained by Tom, many individuals feel it is their sworn duty to surface what they consider to be wrong and they should be considered as the healthy voice of warning, rather than internal challengers. In Tom’s words “whistleblowing as a voice of justice and openness is a critical course corrector for avoiding group sickness”. To this end, Mary referred to research by professors Kyle Welch and Steve Stubben who studied the NAVEX Global data showing that whistleblowers are good for companies’ bottom line.
The speakers also discussed whistleblower rewards. As Mary explained, the U.S. whistleblower reward programs (i.e. CFTC, SEC, IRS and the False Claims Act) serve as a financial safety net around individuals who bring information on wrongdoing to the government. She also emphasized that, despite the success of such programs in the U.S, they are often deemed culturally inappropriate in the UK where they are met with significant opposition. Tom explained that he was initially of the view that rewards might hinge the motivation of whistleblowers and colour their actions. However, his perception completely changed when conducting research for his book as he discovered that, even when whistleblowers win cases in court, their careers are over almost without exception. He therefore now sees rewards not as a bounty but as compensation for life-long career loss. Tom’s research also concluded that if whistleblowers produce good facts, their motivation should be irrelevant.
Mary asked Tom about the ways of normalizing whistleblowing. Tom stated that everyone should understand the basic psychology that human beings have a deeply rooted drive towards group unity which distorts one’s individual sense of justice, and that people need to be aware of their own instinctive reaction to whistleblowers. In his view, leaders need to set the right tone to signal that whistleblowers are welcome and celebrated. Each corporation should ideally have a multi-disciplinary group of individuals who understand what whistleblowing is and support whistleblowers during the disclosure process.
Mary noted that European companies with 50 or more employees are now mandated to have internal reporting systems in place by virtue of the EU Whistleblowing Directive. Tom added that the COVID-19 pandemic gave urgency to surfacing whistleblower complaints to the public quickly and discussed his work with Constantine Cannon and others in submitting a hack as part of the Financial Times’ Global Legal Hackathon seeking to convene a multidisciplinary panel of experts who could advise prospective COVID whistleblowers in real time to figure out the most effective way to proceed with a whistleblower complaint where anonymity could be part of the arsenal.
Tom explained that the fact that whistleblowers are so prominent is not a good sign. He stressed that, although whistleblower laws are evolving, they are not evolving as fast as the wrongdoing in an age of normalised fraud. He concluded that we need to do something radical to change the structure of our society.
The interview came to an end with discussions of the current pandemic. As noted by Mary, the UK HMRC observed a 53% rise in whistleblower tips regarding furlough crimes and fraud. Tom remarked that the pandemic is a new alignment of what is important in everyday life and has put things into perspective. The current crisis has encouraged people to rethink their own lives and is a natural time for doing “the right thing”. There is a greater sense of community now and people readily step forward to speak up.
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