Preventing a toxic work environment through whistleblowing

October 31, 2016

I thought about the struggles of whistleblowing when I read a piece in the Financial Times, which touched upon a toxic work environment that led to some of the illegal conduct involving the Libor scandal. At one of the banks involved, a supervisor used to hit one of his employees … “on the back of the head with a miniature baseball bat. This was to humiliate, not hurt him. Mr Johnson [the supervisor] also made him stand on a chair on the trading floor when he could not name the capital of the Philippines”.

Not surprisingly, the bullying was not only physical but verbal as well. In testimony, it came out that Johnson had called Mathew [the employee] “a ‘deaf git’ [Mr Mathew has hearing difficulties] and once sent him an email headed ‘brick dain’ because the bank’s compliance department would have picked up an email headed ‘dick brain’.” If this is not evidence of a completely toxic workplace, I have not seen a much greater example.

This is more than simply a failure of corporate culture, it is a failure of compliance. SCCE CEO Roy Snell has been one of the most forceful in articulating the proposition that a chief compliance officer (CCO) and compliance practitioners in general have to stand up for employees like Mathew and against corporate bullies like Johnson.

One of the things every compliance function has to create is a safe place for such bullying conduct to be reported. The FT reported that it has “interviewed several whistleblowers over the years. Most have been driven half-crazy by the persecution, lawsuits and vituperation that followed their act of public service”. While, according to the FT, “you could call the ethics hotline. This is clearly the right thing to do, but it will almost certainly spell the end of your career and you and your family’s happiness”.

Every compliance department must make it clear that any employee who comes forward with such tales will not face retaliation. Moreover, a whistleblower should be actively rewarded for bringing such antithetical conduct to the attention of someone at the company who can do something about it. For if such a culture is allowed to not only exist but flourish, there will always be legal repercussions in the form of some violations.

Every compliance practitioner needs to commit to preventing such conduct at his or her company. There should be some type of detection system in place to pick up such conduct if it does occur. Finally, there should be a remedy immediately brought to bear if such conduct does appear.

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