Dangerous Silence

From hal shear on 19 May 2008, 16:30

Is it possible that the reluctance to report "observations of mis-conduct or violations of corporate policy" is an assessment by the employee that such pronouncements do not paint an absolute bright line of moral or ethical judgment? The test might very well be "is the behavior harmful, is it immoral according to my beliefs, is it dangerous, etc.?" That is, do employees reinterpret the policy in real time? Do they make a calculation relative to the likelihood the company/their job are put at risk? Do we have research which distinguishes reporters/nonreporters of violations by how secure they were with their professional career, financial status?
This goes to the question of "outing and protecting" the reporter.

Also, if the number of crime rewards calls, that is, reports of criminal activity, goes up when the economy goes down (as news articles state they are now doing), do ethics reports do the same?

Hal Shear
Managing Director
Board Assets, Inc.
http://www.boardassets.com/

From Robert "Bud" Reid on 20 May 2008, 17:00

I’ve just now been able to review the responses from Norm Augustine, Pat Harned, and Scott Avelino to your Dangerous Silence blog. Having served for twenty years as an ethics officer for Lockheed Martin, both for operating units in the field and at the corporate headquarters, I would like to share my perspective on the dangerous silence of employees who know of misconduct, but who choose not to report it.

Surveys, not only by Ethics Resource Center and KPMG, but also within Lockheed Martin and other companies, show that people don’t report wrongdoing principally because there is a lack of trust and confidence that anything will be done. And, of course, surveys show fear of retaliation as a second major factor. Also, some employees don’t report issues, simply because they don’t want their work group to be seen in a negative light.

Norm Augustine is right to say that the majority of issues are human resources related, with most being very minor. But, I don’t think it matters in the long run, whether or not unreported issues are minor or major. An organization must work everyway it can to eliminate the reluctance of employees to report matters on a timely basis, no matter how minor.

An organization must work diligently to gain the trust and confidence of its employees, so they feel free to make reports to the ethics office or external hotline or to their managers and supervisors. It’s a trust issue, a company loyalty issue, a mark of good teamwork, caring, taking responsibility, being a good citizen and so on. This is what must be instilled in employees.

This is, of course, a two-way street. If the company wants this kind of support from its employees, the company must be willing to treat its employees in the same fashion. The old saying “if the company takes care of its employees, the employees will take care of the company" is true about ethics and trust. The payoff in this drill is that, while you get a lot of nickel and dime stuff to deal with, you stand a great chance of capturing the showstopper or “stop the presses” issue, almost as soon as it happens.

I would also remark that, while many of the human resources issues are minor, they aren’t usually minor to the employee. So, of course, it is important to act on these matters, not just because it’s the right thing to do, but you gain the employee’s confidence and win over another supporter for the program. And, you can be sure the employee will be sharing his or her experience at the water fountain during the next work break.

I would add that many of the employees who are reluctant to report wrongdoing are not just rank and file employees. In many cases, they occupy leadership positions and are supposed to be setting the example for subordinates. Their trust in the company and its ethics office is critical. Their leadership, or failure, here becomes known over time and will strengthen--or devastate--the program.

Robert "Bud" Reid
Ethics Officer (retired)
Lockheed Martin, Inc.

From Grace Mastalli on 21 May 2008, 00:00

Good question from Hal about the concern that fraud and misconduct were not being reported due to the economic vulnerability of those who observed it. This concern was one basis for the Qui Tam amendments to the US False Claims Act in 1986. These provisions-- inspired by perceived problems in the defense industry -- provide both Rewards and Protections to certain Whistleblowers who in effect "stand in the shoes of the government".

Rewards: The False Claims Act provides an incentive for reporting by granting successful Qui tam whistleblowers from 15 to 30 percent of any award or settlement amount (sharing in the government's recovery.) In addition, the statute provides for payment of their attorney's fees, making Qui tam actions a popular topic for the plaintiff's bar.

Protections:The False Claims Act also prohibits an employer from harassing or retaliating against an employee for attempting to uncover or report fraud on the federal government. If retaliation does occur, the whistleblower may be awarded "all relief necessary to make the employee whole," including reinstatement, back pay, two times the amount of back pay, litigation costs, and attorney fees.

Of the two elements of the federal law, confidence in the protections appears to be more important to major corporate whistleblowers than the potential financial rewards. However, data suggests that Medicare fraud reports and recoveries in particular have been driven in part by lower economic status whistleblowers such as data entry clerks with readily transferable job skills seeking financial reward.

Regardless, let there be no mistake that the best business processes for uncovering misconduct unambiguously exclude consideration of the motives of the whistleblower. Consider, for example, if pharmaceutical research data in fact has been faked to expedite FDA approval, does it matter that the fraud was disclosed by a spurned lover or jealous colleague? Silence about misconduct IS dangerous. Silence about scientific misconduct can kill. Motivation matters little when the misconduct is real.