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A Siemens AG (NYSE:SI) subsidiary's widely reported problems with a whistle blower and federal government contracts should serve as a cautionary tale for all businesses now subject to the FAR/DFAR mandatory disclosure requirements.

The unwillingness of employees to report misconduct or volunteer their good ideas for helping their companies to improve products and services lies in their lack of trust that good will come from speaking up. Their mistrust, as Detert and Edmonson found, may be a result of their own personal experience, their knowledge of the negative consequences suffered by others who spoke up, or a culture of collective myths, which may be rooted in fact or only in their fears.

This week at the National Contract Managers Association's (NCMA) Annual Congress in Long Beach, California, I heard a number of concerns from those nervous about the FAR/DFAR's new ethics and mandatory disclosure requirements for government contractors. But, I also heard many strong indications from government contracting officers that they view this new basis for suspension and debarment as being both welcome and long overdue.

In our first blog (January 1, 2008), we asked, Why do employees continue to remain silent in the face of corporate ethical lapses? We cited data from the Ethics Resource Center’s 2007 National Business Ethics Survey which found that more than half (56%) of employees witnessed what they believed to be serious misconduct in the previous twelve months, and nearly half of them (42%) refused to report that misconduct to anyone.