Preventing Retaliation in Your Organization
By Steve Watkins
[Reprinted with Permission from Ethics Resource Center]
When people call out wrongdoing at their company, they help keep the firm on the up and up. But they often do so at their own peril.
A survey from the Washington, D.C.-based nonprofit research firm Ethics Resource Center shows that retaliation against corporate whistle-blowers jumped in the past two years.
Of those who reported wrongdoing, 22% said they suffered retribution.
That’s up from 15% since 2010. “That’s significant and worrisome,” said ERC President Patricia Harned.
Leaders can prevent such retaliation in their organizations.
Be upfront with employees that any type of retaliation will be treated as misconduct, Harned said: “That reflects a clear commitment from the highest levels of the organization.”
Build the right atmosphere.
Strong ethics programs send a message to employees that the company won’t tolerate illegal or unethical activities, Harned says. Firms with those programs want to know if there’s trouble, so they can ferret it out. “You want to create a culture where reporting is encouraged and rewarded,” she told IBD. “If you don’t have that, you’re shooting the messenger. It does a lot of harm in the long run. That’s the sad irony of these findings.”
Change the outlook.
When laws change to protect whistle-blowers, companies follow them for a while. Then they slip, says Steve Kohn, a lawyer who has represented whistle-blowers 30 years and is executive director of the National Whistleblower Center.
Make protection part of how the firm operates. “You want to change the corporate culture so people who report securities fraud are not viewed as villains,” Kohn said.
See the pluses.
Most firms don’t know the benefits of protecting whistle-blowers, says Kohn, author of “The Whistleblower’s Handbook.” They don’t view it as a way to make sure their firm is doing things right. They take the short view that it makes the firm look bad. “Instead of companies adjusting to it, they’re fighting it,” he said. “But people are beginning to realize whistle-blowing gets rid of the wrongdoing and violations.”
It takes about two months on average for firms to investigate reports of wrongdoing. That’s when leaders should check in with people who filed complaints to make sure they’re not being poorly treated, Harned says.
In many cases, people who reported misdeeds more than once suffered more retaliation than one-time reporters, Harned says.
Watch the severity.
The most common types of retaliation include getting the cold shoulder from co-workers and being passed over for promotions. A growing number â€” 31% vs. 4% two years ago â€” said they suffered physical harm or property damage; 60% said they were verbally abused. “It does seem to be escalating, with more instances of very overt things against them,” Harned said.
Companies should give more power to their chief compliance officers and have them report directly to the CEO, Kohn says. That removes roadblocks. “It shows compliance has a full seat at the table,” he said. “Every manager in the company must know that compliance will be reporting to the head of the company, unfiltered.”
Reward the right actions.
The CEO can publicly praise employees who report violations.
Consider putting credible whistle-blowers on the firm’s board, Kohn says. “Some of them have a lot to offer,” he said. “But the culture of many companies is to blacklist them.”