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article imageWhistleblowers making their mark on business world

By Valentin BONTEMPS (AFP)     Nov 22, 2018 in World

UBS, Danske Bank, Cambridge Analytica and now Renault-Nissan: the probe into Carlos Ghosn demonstrates the growing power of whistleblowers as transparency requirements tighten in the corporate world.

Ghosn, who is suspected of having under-reported his income by half between June 2011 to June 2015, was arrested at the beginning of the week by Japanese authorities.

While some information about who pointed the finger at Ghosn is beginning to emerge, the whistleblower's motive remains unclear.

According to Japanese media, the he or she works in Nissan's legal affairs service.

Jenny Corbett, a researcher at the Foundation for Australia-Japan Studies, said "it's unusual because the culture of whistleblowing isn't very well established in Japan".

This, she said, may "suggest there's some kind of internal tensions or struggle for power within the company".

For Patrick Wiedloecher at the French Business Ethics Club, the motivations of the Nissan employee, which could be either personal or political, don't distract from the person's status as a whistleblower -- if the allegations turn out to be true.

"There are many different motivations for whistleblowers. Sometimes they act to defend the common interest, sometimes to protect themselves, sometimes for personal revenge," said the former ethics officer for France's postal service.

He believes it is also part of a much larger phenomenon hitting the business world.

- 'Tidal wave' -

In recent years there have been numerous cases of employees denouncing illegal practices.

A decade ago UBS was stung by one of its American employees denouncing how the Swiss bank helped US citizens evade taxes.

Former UBS Group AG banker Bradley Birkenfeld  who as a whistleblower helped US authorities prosecut...
Former UBS Group AG banker Bradley Birkenfeld, who as a whistleblower helped US authorities prosecute the Swiss bank for tax fraud
Eric FEFERBERG, AFP/File

In 2014 whistleblowers provided information on how Luxembourg was providing sweetheart tax deals to multinationals, which allowed them to avoid paying taxes in other countries.

This year, whistleblowers disclosed how Cambridge Analytica misused the personal information of Facebook users and how hundreds of billions of suspect dollars passed through the tiny Estonian branch of Danske Bank.

"There is a tidal wave on the international level" driven by a desire to "battle against an abuse of power" said Nicole-Marie Meyer, who handles anti-corruption affairs at Transparency International France.

"Political and economic leaders are increasing being held to account by citizens," she added.

- 'Nothing remains hidden' -

A study published last year by the Freshfields Bruckaus Deringer law firm that surveyed 2,500 people in the United States, Asia and Europe, found that one out of every two executives had been involved in whistleblowing cases, either by spilling the beans on their own initiative or after being alerted by a whistleblower.

Christopher Wylie blew the whistle on Cambridge Analytica and its abuse of Facebook's data priv...
Christopher Wylie blew the whistle on Cambridge Analytica and its abuse of Facebook's data privacy provisions
Mandel NGAN, AFP/File

"Today, nothing remains hidden for long -- information circulates very quickly," said Widloecher.

"The market economy is an economy built on confidence. Companies have to inspire confidence or they are at the mercy of their competitors," he added.

A recent study in the Harvard Business Review found that whistleblowers were in fact a sign of a healthy company that had good internal conflict resolution procedures and a desire to reduce risks.

"Companies that more actively use their internal reporting systems can identify and address problems internally before litigation becomes likely," said the study by Stephen Stubben and Kyle Welch.

Their study also found that such companies were also typically more profitable, with fewer lawsuits and less legal settlement amounts.

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