Twenty-three years after Enron filed for bankruptcy, not much has changed regarding the culture of whistleblowing and reporting internal fraud. Although 56% of financial professionals reported that they had detected or suspected fraud within their organizations, the majority ( ) remained silent.
As we have seen from the recent devastation related to the Boeing scandal, today's whistleblowers continue to face enormous pressure, adversity, and opposition to coming forward — and in extreme cases this pressure leads to truly tragic consequences for individuals.
in 2001I became a whistleblower, warning the CEO of Enron of suspicious accounting activity. In doing so, it exposed one of the largest corporate frauds in history. I wasn't expecting a gold medal – I was just doing my job – but I ended up jeopardizing not only my job, but also my career, livelihood and reputation. Following my decision to come forward, I was accused of trying to destroy Enron, labeled a troublemaker, and stripped of all work assignments. Even though I did the right thing, I later learned that company executives tried to fire me after I first alerted them to the issue. After that, my colleagues ostracized me and called me a “snitch.”
Intimidation of whistleblowers
When you look up the term whistleblower in the dictionary, synonyms include traitor, snitch, rat, and gossiper — all of which are negatives to describe someone who did the right thing but it was difficult. Unfortunately, this is an accurate representation of how whistleblowers are viewed, and even treated. From Medias, a fraud detection software company I partnered with, shows that nearly a third (32%) of finance professionals have seen whistleblowers called names directly to their faces or behind their backs for their reporting. Insults are just one example of the bullying and backlash that whistleblowers face, and one of the many reasons why financial professionals are afraid to report internal fraud.
Everyone knows that the right thing is often the hardest thing to do, and it's often not easy or straightforward. Whistleblowing involves a power dynamic that favors the organization over the individual, which exacerbates the problem and makes it more difficult for employees to speak up. This is made worse by performative cultures within modern organizations that protect whistleblowers in theory, but not once the whistleblower actually comes forward.
From my own experience, and now having spoken with many people who have had a similar experience, when an employee first becomes aware of something suspicious or fraudulent, they find themselves staring at the edge of the abyss as they consider reporting it. Fears of isolation and disbelief immediately come to mind, leaving employees wondering if it's better to just “be a team player,” keep their heads down, and ultimately ignore their fears in order to stay safe.
While a common fear for those considering blowing the whistle is retaliation in the workplace, it doesn't stop there. Nearly half ( ) of employees say the legal system simply does not provide adequate protection for whistleblowers.
Empowering whistleblowers – real
For individuals to feel confident about coming forward, organizations must value whistleblowers, foster a culture of protection and provide a community of support. It is also important that whistleblowers feel empowered to report and have tangible evidence to support the fraud they have discovered or suspected. A significant number of financial professionals reported that they would feel more confident and comfortable about whistleblowing and reporting fraud if they had evidence. This evidence could come thanks to AI tools that analyze thousands of past transactions to identify anomalies that may represent suspicious or fraudulent activity.
In the years since I became a whistleblower, I have dedicated myself and my career to defending whistleblowers, building communities, and encouraging professionals to speak up and do the right thing. That's why I've dedicated my career to raising awareness of the struggles whistleblowers face and the obstacles organizations may face that create a difficult environment for employees to feel frustrated. While whistleblowers may feel alone, they are part of a powerful movement.
Sherron Watkins is a leadership and ethics advocate and known as the Enron whistleblower. She is an internationally recognized speaker on the topics of ethics, corporate governance, organizational behavior and the toxicology of whistleblowers.
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