Compliance and the Petraeus Scandal

By Lauren Barnett

PharmaCertify™ Compliance Specialist

CBS Moneywatch recently ran an article about the lessons businesses could learn from the situation that brought on the resignation of General Petraeus as Director of the CIA. Is there a compliance lesson to be learned here? If we look at the situation through the corporate lens and skip past the “soap opera” elements, we have a classic whistleblower situation. Let’s set the scene.

Person P is a high ranking, highly esteemed individual knocking on the door of the c-suite. As it turns out, Person P and Person B are engaged in some sort of activity that is at best unethical, and at worst, illegal, and that activity could cause a problem with the government. Person K knows about it, but doesn’t feel the need to say anything until Person B starts dishing out threats; perhaps saying to keep quiet, or threatening Person K’s position within the company. Person K decides the time is right to come forward and report the threats, as well as the activity of Person P and Person B. The investigation eventually results in Person P resigning his position.

So what went right? First, Person K identified the questionable activity and had access to a method for reporting it. Through training provided by the company, Person K knew the activity was not permitted. The company had procedures in place  to allow Person K to report the issue, and also created an environment in which Person K felt comfortable coming forward to report the issue.

Second, the report was taken seriously and was investigated. The high ranking status of Person P was a non-issue and the evidence brought forward was not swept under the rug to protect Person P.

Third, there were repercussions (as far as we know) for Person P and for Person B. Again, the rank of Person P was not an issue. We don’t know if the company allowed Person P to resign or if Person P saw the writing on the wall and chose to leave before the company imposed its own discipline. In either case, there was no effort to cover up the situation or simply slap Person P on the wrist.

Sounds like a textbook handling of the situation, right? Well not completely. Unfortunately, Person K didn’t come forward as soon as she knew Person P and Person B were involved in unethical or illegal activity. She waited until she was  threatened to file a report. Maybe Person K simply didn’t care about the activity, despite the fact it could mean trouble for the company. Or, perhaps she feared retaliation or assumed no punishment would occur due to the status of Person P.

Communication is key. Employees need to know the policies apply to everyone, regardless of rank or their perceived value in the company. The policies regarding the protection of those who do come forward also need to be communicated throughout the organization.

These situations are never easy, and admittedly it can be daunting for employees to come forward. (And if we’re being honest here, whistleblower awards from the government don’t make it any easier.) It all starts with training and communication about what constitutes appropriate behavior and the responsibility of each employee to ensure that business is conducted appropriately. Whether through an open door policy and/or an anonymous reporting hotline, employees need a clear pathway to report problematic behavior. However, it will all be for naught if the company doesn’t take reports seriously, conduct a thorough investigation and then act to correct the behavior.

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