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News & Insights
An October 2011 survey by law firm Littler Mendelson indicated that 96% of executives surveyed are at least moderately concerned about potential whistleblower claims against their companies in light of the Securities and Exchange Commission’s (SEC) new whistleblower program. The firm’s survey of senior legal, compliance and human resources executives at publicly traded or highly-regulated companies also found that 45% of respondents’ companies had already experienced a whistleblower claim in the last 12 to 24 months. In addition, 67% anticipated whistleblower claims to increase within the next year or two.
There were some positive signs in the Littler Mendelson survey. While only 65% of respondents characterized their companies as being “moderately prepared” to handle whistleblower claims, 84% have taken steps to protect against unlawful retaliation claims and another 86% have either scheduled or are considering scheduling whistleblower and/or retaliation-related training in the next 12 months. These are good first steps. Establishing a strong ethical culture is mission critical for every commercial entity. As I emphasized in my recent article in the New York Law Journal, to remain successful and scandal-free in this era of increased regulation and law enforcement scrutiny, organizations must be more forward-looking and establish a culture of integrity that deters wrongdoing and promotes early, internal reporting of wrongdoing when it occurs.
The tide is changing. Crucial reforms are now in place to protect and encourage whistleblowers to come forward and early signs from the SEC indicate that whistleblowers are breaking their silence and taking a stand against misconduct. Given the results of the Littler Mendelson survey, it is crucial that organizations wholly commit to fostering a workplace characterized by integrity and transparency. The stakes are too high for anything less.