ERC in the News

Just before Thanksgiving, news broke that the Securities and Exchange Commission (SEC) received 3,001 tips to its new Whistleblower Office during fiscal 2012 (starting in October 2011). This undoubtably begs the question: How can we put that number into context?

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

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Glenn Demott says he wouldn't hesitate to blow the whistle again on corporate wrongdoing, even though he paid a high price the first time he did.

The news has been filled lately with stories about whistleblowers getting staggeringly big pay outs for exposing wrong-doing at their workplaces. On Tuesday, Associated Press reported that former UBS banker Bradley Birkenfeld got what may be the largest award ever -- $104 million from the Internal Revenue Service for his tips on a massive tax fraud conspiracy at UBS.

 The number of people reporting workplace misconduct is on the rise, and so is retaliation against them. But you can do the right thing without jeopardizing your career.

In a 2011 national survey, the Ethics Resource Center found that employees who engaged in social networking had a higher tolerance for questionable activities. For example, 50 percent of those who were avid social networkers felt that it was acceptable to hold onto documents such as annual reports and company memos from their current company, in case they needed them in a job with a new company.

A recent study of ethics at U.S. Fortune 500 companies holds good news and bad news for compliance officers: Employees are more willing than ever to report wrongdoing, but levels of misconduct and whistleblower retaliation remain high.

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Observed misconduct is more common in Fortune 500® companies than at the average business in the U.S.—although not dramatically so.

Fifty-two percent of workers in the Fortune 500® companies observed misconduct in the past 12 months, compared with 45 percent among all companies in the U.S, according to the Ethics Resource Center’s (ERC) National Business Ethics Survey of Fortune 500® Employees. 

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U.S. companies that earn the most revenue face unique challenges that can increase the level of ethical misconduct among their employees, according to a survey report released July 24 by the Ethics Resource Center in Arlington, Va.