An Overview of Relationship Management and Why it is Important for Corporates
Introduction: Why is Relationship Management Important? If you are working and have a bank account, chances are that you would have heard of the term Relationship Manager who is tasked with the responsibility of attending to your banking needs as well as proactive account management. Further, if you are working for a corporate and are […]
Corporate Philanthropy and Direct Marketing
What is Corporate Philanthropy? Corporate philanthropy is the act of donating money to social causes. In these times, when corporate social responsibility is the buzzword what with governments specifying the terms under law, corporate philanthropy is no longer the earlier scenario where employees pool together money with matching contribution from the organization and then they […]
Difference between Market Segmentation, Targeting and Positioning
A market refers to a set up where two or more parties are involved in transaction of goods and services in exchange of money. The two parties here are known as sellers and buyers. It is the responsibility of the marketers to create awareness of their products amongst the consumers. It is essential for the […]
Attitude Scales – Rating Scales to measure data
Scaling Techniques for Measuring Data Gathered from Respondents The term scaling is applied to the attempts to measure the attitude objectively. Attitude is a resultant of number of external and internal factors. Depending upon the attitude to be measured, appropriate scales are designed. Scaling is a technique used for measuring qualitative responses of respondents such […]
Print Advertising – Newspapers, Magazines, Brochures and Fliers
Print advertising is a widely used form of advertising. These advertisements appear in newspapers or magazines and are sometimes included as brochures or fliers. Anything written in the print media to grab the attention of the specific target audience comes under the purview of print advertising. People who read newspapers or other publications have a […]
Anyone who has been following financial and business news over the last couple of years would have heard about Wirecard, the embattled German payments firm that had to file for bankruptcy after serious and humungous frauds were uncovered leading to many arrests and the subsequent insolvency of the firm.
Indeed, the Wirecard scandal shook the German financial, business, and political establishment to the core so much so that it is being likened to the Enron debacle, which happened in the United States in the beginning of the 2000s.
The Wirecard scandal is a classic case of hubris and connivance at the highest levels of the firm in dubious business dealings and that too, with the full knowledge of the higher ups.
In this context, it is worth noting that the Wirecard scandal is also a lesson for both regulators and the Whistleblowers who often take great personal risks to expose and report the frauds in their workplaces.
Moreover, the way in which Wirecard treated its whistleblowers by first denying the allegations, then attacking the integrity of the latter, and worse, intimidating them is something that is unacceptable.
Whistleblowers are individuals who are courageous enough to report frauds at their workplaces and hence, must be treated with respect and due care.
It is simply not done for corporates to shout them down or otherwise ignore them and their complaints and in the process, undermine their courage and confidence.
This is what exactly happened in the case of the Wirecard, which ultimately forced the whistleblower to go to the premium business publication, Financial Times or FT, with his findings on the fraud being perpetrated at Wirecard. FT, took it upon itself to assign reporters and experts on the case and it was only after sustained investigation by them that the German regulators took cognizance of the fraud at Wirecard leading to its demise.
While Wirecard’s treatment of the whistleblower was reprehensible enough, it also exceeded all boundaries of restraint by attacking the Financial Times and its staff who were engaged in the case.
It is a matter of pride for the whistleblower and the publication that Wirecard ultimately was found guilty of serious malpractices and heads began to roll among its senior executives, as well as it being declared insolvent. However, it is a fact that whistleblowers take risks.
If one browses through textbooks on business and management, whistleblowers and their role in the modern corporate world is often treated as an afterthought and given a few pages of discussion in such texts.
However, it is our argument that it is high time for the corporate world and the regulators as well as the broader public to demand changes in the way whistleblowers are treated.
For instance, it is clear from the many corporate scandals over the last few decades that serious frauds often are invisible to the external world and many leading Blue Chip firms often present a rosy picture of their business, whereas in reality, they would be in Neck Deep trouble owing to malpractices.
This is where insiders and their knowledge and suspicions of frauds are valuable as they have access to information that is often hidden purposefully from the outside world.
Therefore, whistleblowers play an important and critical role in the contemporary corporate ecosystem and so, firms and regulators have to have codes of conduct on dealing with such individuals.
It also goes without saying that whistleblowers need to be offered legal and other forms of assistance, support and protection to ensure their personal safety.
In times when many corporates have been found to be deficient in aspects of corporate governance and in some of these cases, the boards themselves have acted improperly; it is more the reason for regulators and legislators to draft legislation to address how corporates must deal with whistleblowers.
For instance, in the case of the Indian Software giant, Infosys, the whistleblowers were first dismissed and then laughed at, and it was only after they went to the press as well as to the stock exchanges in addition to anonymous placement of the facts on select websites that Infosys and the regulators began to act.
This is again an example on how NOT to handle whistleblower complaints. Moreover, it is a sad fact that unlike in Wirecard’s case, there was no significant damage to Infosys or its senior leadership from the episode.
It speaks volumes about the India Inc. that whistleblowers are regarded as irritants and nuisance, instead of as courageous individuals who risk everything to report frauds.
More so when so many of the whistleblowers often feel torn between their sense of loyalty to their employers and the moral desire to uncover and complain about frauds and malpractices in workplaces.
Last, what the Wirecard and Infosys cases reveal is a deep distrust of anyone who dares to go against the status quo in corporates and this is something that business leaders and other visionaries should address.
More so when such allegations are made against the very top leadership as such leaders are expected to lead by example.
In addition, whistleblowers often prevent the entire firms being dissolved as regulators who act in time often salvage the situation and avert collapse of the firms.
To conclude, we need a new approach on dealing with whistleblowers by corporates and the regulators.
Your email address will not be published. Required fields are marked *
Corporate Reputation Management in the Post Truth Era and the Age of Fake News
February 12, 2025
Effective Corporate Governance Has to be Practiced at all Levels of the Organization
February 12, 2025
