Don't Hire Her; She's a Whistleblower

Last month’s LinkedIn post highlighted how whistle blowers are the “salt of the earth” employees and an important component of a company with integrity and ethical conduct. Using various analogies and metaphors, the lack of salt in the corporate body, like the human body, is harmful. While bitter, salt is a critical and healthy part of a human body, just as whistle blowers are for an effective compliance and ethics program. Together, the Chief Compliance Officer, the Board and whistle blowers are powerful allies to hold management accountable for their actions or inactions. https://www.dhirubhai.net/posts/youngerict_our-salt-of-the-earth-whistle-blowers-activity-6776981045230243841-Rygp

This article is a working draft excerpt of my upcoming book, “Declaration of Independence – Strategically Partnering the Board and Independent Compliance to Hold Management More Accountable”.

 “Don’t hire “Michelle” – she’s a whistleblower; we don’t want a trouble maker”, my boss declared. It was a direct order for me not to do so. I was stunned. Michelle seemed perfect.

I had joined an elite, multinational firm about 90 days earlier to explicitly change the culture of the firm by re-engineering the Compliance department. I urgently needed a deputy CCO because I pretty quickly concluded three things about my existing, inherited direct reports: 1) they’d unsuccessfully posted internally for my role, which was a coveted enterprise-wide global CCO role which I’d also learned that dozens of other, qualified CCOs from other external firms had also sought, 2) my directs and by extension, some of their staff consequently but quietly resented me the moment I’d joined, and 3) my new boss hired me less to build an enterprise-wide compliance program to make it more effective and sustainable, but more to restructure targeted individuals he didn’t like. Including some of my directs. Indeed, he’d verbalized a specific list of targets to restructure with an adequate severance package.

Frankly, I wasn’t very impressed with any of my directs either; which is why I sought to bring in a qualified, deputy whom I could trust. Michelle, to me, seemed clearly qualified because she was smart, articulate, and that she worked for a rival firm. She possessed the right demeanor, skills and experience. Which is why I was stunned when directed by my boss not to even consider this person. If my boss’s directive was not a form of retaliation and blacklisting, I don’t know what is.

For ease of visualization, let’s call my boss the “Sidekick”. Every TV talk show seemed to have a sidekick at least in the “old days”. Ed McMahon epitomized the classic side kick to Johnny Carson of the famous late night, Tonight Show. My boss was the Sidekick not because he looked like Ed McMahon but more because sidekicks are props to the big cheese, in this case our CEO. Sidekicks are also typically full of hot air. What they say is fluffy and sets the stage for the star’s punchlines. “Sizzle without the steak” as some I know used to say.

 Source: Bettmann – Gettyimages.com

 The difference, however, is that this Sidekick also slithered, with a forked tongue. More to the point, I was stunned because my boss was an experienced chief openly ordering me not to hire someone who had possessed integrity and ethics. According to Sidekick, Michelle the apparent “whistleblower” had allegedly raised concerns and she’d directed them straight to her corporate board of directors without informing her management. I faced a dilemma. Do I “aid and abet” Sidekick’s directive by disqualifying (blacklisting) this well-qualified candidate, or do I act on my own with courage and persuade my boss to be more open-minded, allowing me to consider, interview and potentially hire Michelle?

I chose the latter. First of all, how did I know that Sidekick’s allegations or suspicions about Michelle were true? Second, this was my compliance and ethics department to re-engineer and I sought the authority to at least interview whom I considered to be the best qualified candidates. And third, even if true about Michelle blowing the whistle on her current firm’s management or underlying weaknesses, why would I reinforce any retaliation or blacklisting which appeared more like a conspiracy occurring between competitor firms? And, if indeed the two firms were blacklisting an individual, isn’t that a form of illegal or collusive, anti-trust behavior in the eyes of the US Department of Justice Anti-trust division? Particularly since these two firms were dominant in their industry?

Having said all of this, I decided to put the goal of hiring a new deputy on hold at least for now. My first priority was to assess my newly inherited, existing staff; and my new firm’s corporate culture especially at the top and whether it permeated to our front-line business management in the middle. Ironically, in this case many of my own second line of defense risk and compliance colleagues seemed less ethical than our first line business colleagues. Sadly, this was a reflection of my boss since he’d been hired by our CEO some time before I’d joined and put in place many of these individuals. Worse, his marching orders to me was to target and restructure out some of our senior heads despite the fact that their behavior in effect, reflected his behavior.

I’d ponder and say to myself, “fascinating”, as Mr. Spock used to say in Star Trek, with raised eyebrow.

Complicating matters was that Sidekick would spend 40-50 percent of the time away from the office, traveling to virtually every office of the firm around the globe throughout the year. Worse, he’d insist that an entourage join him, including me. While fascinating to see the world, it was incredibly expensive to the firm and time-consuming while our highest regulatory (and cultural) risk was in our own backyard – the head office itself. Nearly half the time, our global headquarters virtually was unsupervised, like an undisciplined high school without its principal. Which was another reason why Michelle would have been my perfect deputy while I was on the road.

My existing, legacy New York-based direct report could have been my deputy. But I’d learned a couple things after I joined. First, Sidekick decided to have my NY manager report dually into me AND to him, thus undermining my authority by essentially having two heads of the New York office, our Head Office. Secondly, while globetrotting around the world at Sidekick’s insistence, he’d continuously speak negatively about my NY manager and yet very visibly support him when we returned to New York. “Dammit, Spock!”, I’d mutter to myself as if I was Dr McCoy complaining with frustration.

The largest frustration was that while away, my NY manager and his lackeys would run the department like an unsupervised high school despite the fact that our firm was very visibly active in a very regulated industry. I’d consequently complain to my boss that we needed a “vice principal” of our high school roaming the halls, which is why I needed a qualified deputy to mind the high school; not our existing manager who acted and looked like a bully and a bit like Biff in the classic movie, “Back to the Future”.

My wife always said that I was the “dog that wouldn’t let go of the bone”. And with less-than-satisfactory audits recently issued by our internal and external auditors, Sidekick finally acquiesced. He said with a sigh, “you win, you wore me down”. Go interview candidates for a deputy, including Michelle. Sidekick also agreed to eliminate the dual reporting line of my New York manager. I also proceeded to restructure many of the legacy staff and managers I’d inherited, not because Sidekick had targeted them but because they were not fit for purpose in my vision and strategy for an effective compliance and ethics program.

I re-interviewed Michelle (since I had previously interviewed her unofficially despite Sidekick’s orders). I also asked Michelle (and others) to interview not only on a “skip-step” basis whereby the candidates would meet two levels below me (by-passing my direct reports), but also with our business heads, whom by the way, demonstrated high integrity.

Michelle was by far, the best qualified candidate. I was thrilled when she accepted my offer to join our firm as my deputy CCO. From there, our firm’s compliance and ethics program flourished because we proceeded to first upgrade the culture of my own function, and by extension, the efficacy of our company to succeed profitably, and more importantly, safely and responsibly.

Lessons learned:

·     Don’t retaliate against whistleblowers. It’s against the law.

·     Don’t blacklist suspected whistleblowers from other firms from potential hiring, and don’t conspire with other firms to blacklist your own firm’s whistleblowers. It’s against the law.

·     Don’t be intimidated by your boss, however powerful or how much a sidekick of a powerful CEO. Do your due diligence about not only the company you may be joining but also of your boss and staff, where possible.

·     If a whistleblower or whistleblowing complaint is escalated to the board of directors (at least in aggregated form), consider what governance and oversight the board of directors has taken to hold management accountable to address the specific allegation and more importantly, the root cause. The whistleblowing allegation might just be the tip of the iceberg of a systematic problem waiting to explode into a reputational nightmare.

·     Persist, and persist some more. Hopefully, not to the point that you yourself will have to blow the whistle. But if you must, do so. Whistleblowers, as you will see in Part 2 are the “salt of the earth” and therefore are essential elements of an effective compliance and ethics program.