Would you blow the whistle on a boss or co-worker who was stealing from the company?
Chris Duff remembers the time he did – when he reported on a senior VP who was wining and dining a girlfriend on the company expense account.
That was a decade ago, and Duff was bluntly told to stow his whistle or look for a job elsewhere.
The corporate mindset, says Duff, was that everybody was stealing a little bit. “The attitude was, ‘So what if the VP spent $10,000 a year on his girlfriend?’” At the time Duff was a junior-level chartered accountant. Later he held senior positions, including the CFO’s title, in private industry.
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| Chris Duff was warned when he tried to report wrongdoing. |
Today he is a professor of finance and a director of the business commerce program at Victoria’s Royal Roads University.
His background provides a well-rounded perspective into a new workplace culture – a culture now being shaped by changes to corporate governance and whistleblowing legislation that have recently made national headlines.
A shift is occurring. But its impact remains questionable, says Duff.
“I think there is a tremendous fear among middle- and junior-level employees about losing their jobs,” he says.
“So many people have seen things happen to others. In the past it’s been suicide to blow the whistle on someone.”
Ray Renaud agrees that change is slowly coming. The director of Calgary-based Bison Security Group, Renaud says his investigations and security company established a whistleblower hotline in 1992.
He concedes the service may have been ahead of its time. Only now does he see real opportunities emerging.
Called the Confidence Line, the service allows employees of subscribing companies to anonymously report on sensitive issues such as theft, sexual harassment and violence. Using strategies to protect the identify of the complainant, Renaud’s company then investigates the issue.
Renaud says that only about 20 companies subscribe to the service. Most sign on after the fact, when Bison has been called in to investigate major problems.
One argument against hotlines is that they will open up a Pandora’s Box of issues that the company doesn’t want to deal with, or doesn’t know how.
Renaud counters by saying that if employees believe their identity will be protected, they will talk.
As an example, he uses the scenario of a warehouse that’s lost tens of thousands of dollars due to employee theft. His team of investigators would develop a strategy where they would question the entire department and not just a few select individuals.
“When you get in one-on-one with these people, it’s amazing what they know behind the scenes. Under an air of confidence, they are willing to share that information.”
Renaud cites a PricewaterhouseCoopers 2003 report where 37 per cent of respondents reported significant economic crimes in their businesses during the previous two years.
He wonders why companies wouldn’t take steps to mitigate those crimes.
Hotlines give people an alternative when other channels aren’t open, and it’s a service that could be viewed as a tool for recruitment and retention of staff, Renaud says In effect, companies that use such services are saying they won’t put up with wrongdoing because it gets in the way of productivity and casts a broad web of suspicion on a lot of innocent people, causing morale to suffer, Renaud says.
Renaud and Duff believe that changes in the financial arena will help lead to a change in the whistleblowing culture. In Canada, recent changes to Ontario Securities Commission practices will parallel governance rules of Sarbanes-Oxley in the U.S. where “CEOs’ toes are being held to the fire,” Renaud says.
In addition, the Liberal sponsorship scandal has spawned whistleblower legislation to protect public employees.
Other organizations are taking note.
Late last month, the Law Society of Upper Canada passed new rules requiring Ontario lawyers to become corporate whistleblowers if they see unlawful situations that aren’t corrected.
In B.C., Duff says a tight job market means that most people will likely remain cautious about speaking out or doing anything that upsets a superior.
He welcomes the new OSC rules. Under the regulations, audit committees must be independent, not handpicked friends of the CEO, he says. It means that internal auditors can bypass the CEO and go straight to the audit committee with wrongdoings.
“So, someone could say, ‘I’ve checked so-and-so’s expense accounts and he is taking his girlfriend out on the company expense account. Now what are you going to do about it?’ ” Duff recalls that when he blew the whistle a decade ago, he felt helpless and betrayed by the system. (Later, working with another company, he reported another crime and was again told to forget it – or else.)
He isn’t alone.
Earlier this spring, in a highly publicized story, former Canadian biathlete Myriam Bedard told how she lost her job at Via Rail because she reported wrongdoing.
No one, it seems, even an Olympic gold medallist, is safe.
Nevertheless, Duff holds out hope.
At universities he has seen swift and “incredible” change to the whistleblowing culture.
Boards of governors are independent bodies that are ready, willing and able to investigate suggestions of wrongdoing, he says. And employees have been given a number of ways to speak out anonymously.
“If you are a top executive, you’d better watch it,” he says. “There are all kinds of avenues to snitch on the boss.”
He notes that the private sector has also made some positive changes in recent years by writing codes of conduct that deal with workplace practices.
But many don’t go far enough, and as with the legislation being proposed for federal employees, critics wonder if workers will truly be protected.
Duff and Renaud maintain that in order to succeed, employees must have anonymity.
It’s critical that the company president or CEO will act with integrity and consistency when wrongdoing is revealed.
If leaders act ethically on information, people will ultimately come forward.
But if those same leaders fail to take action, the only thing workers risk blowing are their careers.
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