Why the corporate world needs more whistleblowers

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The Australian Securities and Investments Commission (ASIC) has recently said that due to budget cuts it will rely more on whistleblowers in the future.

As possibly its best-known whistleblower, I couldn't recommend it: ASIC was utterly incompetent in the way it misused my information and left me completely alone to deal with the fallout.

Feet of clay can perhaps be expected from the regulator but what of the fleet-footed private sector?

I would argue that an active policy of encouraging internal whistleblowing is clearly in any corporation's best interest: the old adage of a stitch in time saves nine.

It is probably not widely appreciated that I was an internal whistleblower to CBA as well as an external whistleblower to ASIC.

On June 4, 2009, I placed in the hands of the responsible senior executives of CBA all the information they needed to act on the rogue planner Don Nguyen and the managers covering up for him.

I pursued the internal route because by then ASIC had done nothing with the information we had sent it eight months earlier.

The key point to note here is that had the senior management of CBA acted decisively at this point, in June 2009, all of the subsequent brand damage for CBA could have been avoided.

However, aside from Nguyen resigning under pressure, nothing changed until after the whistleblower's visit to ASIC to demand action nine months later, in February 2010.

ASIC then fumbled the ball until a Senate inquiry exposed its incompetence and CBA's malfeasance and the latter was forced into a humiliating apology and compensation scheme for victims.

The problem seems to be a mentality that regards whistleblowers as an enemy rather than as an essential component of corporate governance.

The fact that CBA is now compensating for malfeasance dating back to 2003 strongly suggests that whistleblowers are the last line of defence when all other checks and balances fail.

Furthermore, whistleblowers are most likely only bringing to light problems that will blow up at some point and providing an opportunity to nip them in the bud.

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Jeff Morris is the whistleblower to the corporate regulator ASIC about financial planner Don Nguyen and Commonwealth Financial Planning.