Corporate Governance

INSIGHT: Employee Silence Is Not Golden in Corporate America

July 15, 2020, 8:01 AM

The criminal charges filed in Boston on June 15 against six former eBay employees in the company’s security operations for their unhinged campaign against a blog critic—replete with threatening e-mails and tweets, fake posts on websites and deliveries of pornography, live cockroaches, and a mask of a bloody pig’s head—are the latest example of the types of bad things that happen at organizations with rotten cultures.

How could something this crazy happen at a widely-admired company? Look no further than the directive issued by eBay’s then CEO following an unflattering post by the critic in May 2019: “Take her down.”

This was not an isolated communication and constitutes precisely the type of tone at the top that can lead employees to conclude that their company would want them to pursue such a deranged scheme. And what does it say about eBay’s leaders at the time that not a single employee saw fit to question the wisdom or propriety of such a bizarre plan?

The Most Ethical Organizations Have Robust ‘Open Reporting’ Cultures

The eBay debacle serves as a timely and forceful reminder that the most ethical organizations are those with robust cultures of “open reporting” in which employees are confident that they can raise integrity concerns without fear of retaliation and believe that raising such concerns is valued by the organization’s senior leaders.

Motivating employees to raise their hands requires a concerted and multi-faceted effort, including:

  • steady and credible communications from senior leaders (including CEOs and CFOs) about the importance they place on integrity and open reporting;

  • training about the channels via which employees can raise concerns and the organization’s commitment to making it safe for them to do so;

  • educating managers why it’s in their interests as well as the company’s for them to create an environment in which employees are comfortable raising concerns;

  • investing in ombuds professionals who are worthy of employees’ trust;

  • rewarding employees who raise concerns in particularly challenging circumstances;

  • posting statistics about the number of concerns raised and the remedial and disciplinary actions taken in response; and

  • circulating case studies that affirm a company’s commitment to taking actions when warranted by the investigations of issues raised by employees.

But nothing motivates employees to raise concerns more than the positive example that leaders set when they unequivocally welcome the scrutiny of principled investigations of alleged misconduct at senior levels of an organization.

I can’t think of a more powerful way for a leader to say that integrity is what matters the most.

Trump Administration Actions the Opposite of an Open Reporting Culture

Therein lies the rub with the Trump administration’s serial dismissals of investigators of the alleged misconduct of senior government officials. Since April, President Trump has dismissed the inspectors general for the intelligence community and the Departments of State and Defense and demoted the acting inspectors general for the Departments of Transportation and Health and Human Services. Most recently, he fired the U.S. Attorney for the Southern District of New York in the midst of investigations of associates of the president.

All but one of these dismissals were effectuated on Friday evenings without providing any grounds for them. When pressed for explanations for having taken seemingly vindictive actions in the midst or wake of investigations of allegations of misconduct by senior administration officials, the White House has simply cited the president’s sweeping authority to take such personnel actions, vaguely alleged professional incompetence and/or intimated that the investigators were part of the “deep state” resistance to Trump.

Such bromides may suffice for Trump loyalists. Indeed, when I suggested on LinkedIn that Trump’s post-impeachment dismissal of the inspector general for the intelligence community amounted to the polar opposite of judiciously promoting a culture of open reporting, one Trump supporter took sharp issue with my seeming inability to distinguish between legitimate whistleblowers and the “criminal backstabbing mudslinger” who raised concerns about the propriety of Trump’s interactions with President Zelensky of Ukraine. Another admonished that the disloyal “deep state” did not need any help from me.

It goes without saying that hardcore Trump supporters are entitled to their opinions. It’s also true that, in addition to weeding out corruption and exposing misconduct when they do their jobs well, inspectors general and U.S. attorneys sometimes make mistakes and periodically exercise poor judgment and themselves remain subject to scrutiny when they do so.

Still, in the absence of principled and credible explanations for the recent slew of firings and demotions, the rest of us, Republicans and Democrats alike, are left to conclude that the investigations were unwelcome challenges to the authority of the officials under investigation or, even worse, that the investigators were onto issues that were going to prove troublesome for the Trump administration.

Either way, the resulting tone at the top could not be more antithetical to a robust culture of open reporting. More is at stake than academic principles of good governance. History teaches that bad things happen when employees of private and public sector organizations believe it is neither safe nor valued for them to raise concerns about the integrity of their superiors.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Alex Dimitrief is a partner at Zeughauser Group, where he advises legal departments and law firms on strategic issues. He was the president & CEO of General Electric’s Global Growth Organization in 2018 and previously served as GE’s general counsel and corporate secretary. The views in this piece are strictly his own.

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