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Study Indicates Whistleblowers Indicate a Healthy Company Culture

The Harvard Business Review recently published research about whistleblowers in the United States. It led to the conclusion that whistleblowers, while they may often herald corporate disaster, are actually indicative of healthy companies.

The researchers had access to more than 1.2 million records of internal reports made by employees of U.S. public companies. It found that the more employees used their internal whistleblowing hotlines, the fewer lawsuits their companies would actually face and the less money those companies must pay out in settlements.

The report also looked at the types of firms in which employees most actively use internal whistleblower hotlines. Firms that had more powerful management or very fast growth were less likely to use their internal reporting systems. However, the firms that were active in using their systems tended to be more profitable than those that were less active. In addition, companies that were active with those systems were generally more capable of finding and addressing internal issues before litigation became necessary or likely.

What do these results mean?

Many companies tend to misuse or ignore their whistleblower hotlines — or fear what they will discover if they encourage active use of internal reporting systems. This study, however, indicates that active use of such systems is highly beneficial to a business’s operation. More internal reports are not necessarily indicative of widespread troubles within a company. It could simply mean employees have more trust in their management and are comfortable using the communication channels available to them.

To learn more about what it means to expose illegal behavior and the protections the federal government affords to corporate whistleblowers, speak with a skilled whistleblower lawyer at Whistleblower Law for Managers.

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  • "Steve Kardell was terrific in representing me in some very adversarial discussions with Citigroup and also later represented me in my testimony before the Financial Crisis Inquiry Commission."  -Richard Bowen, Citigroup Whistleblower

  • "Never thought my career would end like it did after 30 years of service. I was part of the first round of the so called reduction of force. I asked myself how can I be part of this with 30 years of seniority. How did they pick these 90 plus employees? Now, the culture of this organization made you question every decision they made. It wasn’t what you knew it’s was a culture of who you know. Nonetheless, I did not accept their severance package. I immediately starting looking for an attorney who would take on my case. After the initial call to Steve I had hope again. He was open and honest about everything and reassured me he would do his best for me, and he did. I had an awesome outcome. Thanks Steve you’re the best."  -S.S.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

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