Not all is bleak in the realm of ethical and responsible leadership. I recently received news of the international award for the Outstanding Case Study on Anti-Corruption, given by the United Nations Compact Principles for Responsible Management Education (PRME) and Giving Voice to Values (GVV), which was announced at the North American Case Research Association (NACRA) conference in Austin, Texas, on 25 October, 2014. Vasilia Kilibarda and Adam Waytz, of Northwestern University, took the prize for their case, Through the Eyes of a Whistle-Blower: How Sherry Hunt Spoke up about Citibank’s Mortgage Fraud.
The case, along with video supplements and teaching notes is already scheduled for use in a number of business education settings at universities around the world. It will be used by many of the PRME signatories, of which there are 480, representing 80 countries. The PRME signatories (i.e. business schools and management –related academic institutions, individual faculty, researchers, and /or students affiliated with a PRME Signatory) have pledged to implement the Principles of PRME.
Sherry Hunt reported to me when I was Business Chief Underwriter at Citigroup- and I had spent countless hours bringing corporate discrepancies to the powers that be, to no avail.
When I was forced to take administrative leave after my repeated warnings , Sherry told me she was going to keep very careful records of Citi’s continued fraudulent mortgage activities, and she did, blowing her whistle four years later.
This case is an important one, as it opens the door to the legitimacy of repeated whistleblowing when all else fails. Yet there absolutely is a conflict between the loyalties one has to the company that has employed one and the ethical construct of assuring one’s employer behaves in a fair and ethical manner.
It is the conflict that I faced, Sherry Hunt faced, Ms. Alayne Fleischmann, recently of JP Morgan Chase faced. Yet when a company exhibits such flagrant disregard for what is honest and fair business practice, what choice is there? One can be quiet, yet eventually the Enron’s of the world implode, taking down innocent people, all becau
se some were afraid to speak up, or stayed loyal to the wrong cause.
Do we need an Erik Holder and Department of Justice incentives to speak out and denounce wrongdoing? Or can we instead instill, make part of the company fabric- guiding principles that applaud ethical business practice. And employee- customer centric actions.
I think, that in the long run- this is the path that leads to engaged employees, satisfied customers and profits.
Richard Bowen is widely known as the Citigroup whistleblower. As Business Chief Underwriter for Citigroup during the housing bubble financial crisis meltdown, he repeatedly warned Citi executive management and the board about fraudulent behavior within the organization. The company certified poor mortgages as quality mortgages and sold them to Fannie Mae, Freddie Mac and other investors.
