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SEC Whistleblower Program
News & Insights
In recent years, the SEC reported a number of important achievements regarding its whistleblower program, including a record number of tips from across the globe; increasingly large sanctions actions against industry giants; and, a more diverse pool of whistleblowers, such as outside analysts, compliance executives and officers and directors. While these developments are encouraging, we must maintain a steadfast focus on the factors that motivate or prevent individuals from speaking up.
Recognizing that witnesses to misconduct often remain silent, how many potential whistleblowers stay in the shadows?
In its 2018 National Business Ethics Survey, the Ethics and Compliance Initiative found that 44% of respondents who reported misconduct experienced retaliation. This is extremely alarming. If those who discover corporate misconduct perceive that they may be retaliated against for reporting it, employees will stay silent.
Without a doubt, fear of retaliation is the greatest impediment to the reporting of misconduct. To counter this fear, organizations must recognize and assuage the powerful fear of retribution both in the design of compliance programs and in establishing the ‘tone from the top.’
But the most powerful antidote is, of course, anonymous reporting.
In crafting the SEC Whistleblower Program, the Commission placed profound emphasis on confidentiality, understanding the fundamental importance of protecting whistleblowers from retaliatory consequences. In addition to protecting whistleblowers who come forward, maintaining confidentiality creates a broader atmosphere that encourages safe reporting. In fact, the record number of tips the SEC has received since establishing the program points to a growing confidence in the protections and incentives offered by the Commission’s program.
If we are to architect true change in the landscape of corporate ethics, we must begin by empowering and protecting those who wish to speak up. Providing a way for whistleblowers to shield their identity is the best way to do so.