More Whistleblowers Are Making Corporate Fraud Allegations

By Neanda Salvaterra  May 6, 2022

Emboldened by the Great Resignation, more employees attached their names to whistleblower reports about a range of issues including fraud, bribery, retaliation and discrimination at companies, and more were inclined to register their complaints with external government agencies last year, according to experts.

Sources say that boards need to monitor corporate culture and ensure that employees feel comfortable reporting issues internally rather than going directly to external agencies before companies have a chance to remediate potential issues.

Although the Covid-19 pandemic reduced the overall level of whistleblower reports made by employees at companies, the health crisis and shift to remote work left people with time to contemplate work climate issues and made them more inclined to use their names when reporting perceived misdeeds internally at organizations, according to data from Navex, a risk and compliance management software and services company that oversees the external reporting hotlines, surveys and data-gathering platforms for large and medium-size enterprises. Workers were also more likely to register concerns with the Securities and Exchange Commission and other outside forums…

The cultural training services are cropping up amid demands from shareholders such as the impact investment firm Arjuna Capital, which pushes companies to take concrete action on issues like diversity equity, fair wages and inclusion.

Natasha Lamb, co-founder and managing partner at Arjuna Capital, said investors are looking for companies that are concerned not just about their reputation but also about substantive action. 

“There’s a big imperative to increase the diversity of companies, and we’re not going to get there through the same patterns that have historically led to white men holding most of the high-paying jobs,” said Lamb. “It's not necessarily good for the business [or] a company’s stocks, and it's not good for our society either. So it certainly makes sense that managers would be assessed on their ability to mentor and promote diverse talent in the organization.”

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