Life after Whistle-Blowing

Enron

FBI

WorldCom

Enron, WorldCom, FBI, HIH

FBI Colleen Rowley

WorldCom Cynthia Cooper

Enron Sherron Watkins

Are Whistle Blowers Inevitable?

Yes since: Corporate fraud will continue to happen Competing personal ethics exist Rewards for whistle blowing are being introduced

But numbers are likely to be on the decline as: Knowledge and experience of corporations and

employees is growing Laws, regulations and audits are becoming more

stringent

Should Whistle Blowers be protected?

Protecting Whistle Blowers is important since they: Demonstrate high moral and ethical standards Are pillars of the corporate world, and act positively to

ensure ethical standards are upheld Face personal risk from the corporations they work for

Employing Whistle Blowers

Would you employ Sherron Watkins, Cynthia Cooper, Colleen Rowley? For:

Desirable Characteristics – work ethic, loyalty(?), trust Builds ‘clean’ business reputation

Against: Alternative Actions were available for exploration Negative publicity Poor employee and colleague sentiment Questionable Corporate loyalty

Whistle Blowing Incentives

What outcomes might paying Whistle Blowers lead to? Costs

Counter Productivity More elaborate schemes developed Greater secrecy Greater Monitoring Costs Prevents internal remedies

Benefits Stakeholder Protection Early intervention, leading to more incentive for firms to be clean Corporate Reputation