Sunday, February 15, 2009

Whistleblowers

No steam trains here, just honest people who see wrong and want to do the right thing.

It seems to me that the term "whistleblower" is viewed as derogatory by many people in society. This seems to be strange but perhaps most of us simply do not like to see our boat rocked. There is nothing quite like the status quo even if this means we are losing out on something important.

Whistleblowers tend to create mayhem if the aftermath of their revelations are anything to go by. Think Enron in 2002 or HBoS in 2008. In each case the primary whistleblower opened up a can of worms that reverberated through society. The real perpetrators of the mayhem haven't exactly got away scot fee but why should the whistleblower carry any of the burden?

I knew several of the key players in the Enron failure and had friends in both Enron and Vinson & Elkins. Friends lost all their savings though misguided loyalty to the company and its ever-climbing and then rapidly plummeting stock. I am sure similar events surround the collapse in the various (many) banks during the current crisis of confidence.

Confidence is the problem. So often the houses of mirrors that reflect a supposed confidence start to implode and when a concerned employee sees what is happening and tries to do something, the collapse is inevitable. In the worst cases it would appear the the whistleblower approached senior management who denied the problem and maintained business as usual. Regulatory agencies likewise ignored the tell-tail signs while the politicians merely hoped the inevitable would not happen on their watch.

I say "Raise a glass to the whistleblower, revere him or her as the custodian of sound capitalism!"