Transcript Slide 1

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