Corporate Accountability →

Does It Pay to Be a Whistleblower?

In 2013, soon after the US Securities and Exchange Commission (SEC) had started a massive whistleblowing program with the potential for large monetary rewards, two employees of a US bank’s asset management business debated whether to blow the whistle on their employer after completing an internal review that revealed undisclosed conflicts of interest. The bank’s asset management business disproportionately invested clients’ money in its own mutual funds over funds managed by other banks, letting it collect additional fees—and the bank had not disclosed this conflict of interest to clients. Both employees agreed that failing to disclose the conflict was a problem, but beyond that, they saw the situation very differently. One employee, Neel, perceived the internal review as a good-faith effort by senior management to identify and address the problem. The other, Akash, thought that the entire business model was problematic, even with a disclosure, and believed that the bank may have even broken the law. Should they escalate the issue internally or report their findings to the US Securities and Exchange Commission? Harvard Business School associate professor Jonas Heese discusses the potential risks and rewards of whistleblowing in his case, “Conflicts of Interest at Uptown Bank.”

Company Reviews on Glassdoor: Petty Complaints or Signs of Potential Misconduct?

Online reviews by employees can signal internal factors that raise the risk of scandal. Research by Dennis Campbell, who analyzed reviews of 4,000 companies, offers insights for managers trying to prevent misdeeds long before they happen.

Truth Be Told: Unpacking the Risks of Whistleblowing

The stakes are high for employees who report potential malfeasance at their companies. Aiyesha Dey and Jonas Heese discuss how companies benefit from whistleblowers and steps regulators could take to empower them. Open for comment; 0 Comments.

How Newspaper Closures Open the Door to Corporate Crime

A study of misbehavior among publicly traded companies illustrates the critical watchdog role that newspapers play, and the problems that arise when publications go out of business. Research by Jonas Heese. Open for comment; 0 Comments.

How Companies Can Increase Market Rewards for Sustainability Efforts

There is a connection between public sentiment about a company and how the market rewards its corporate social performance, according to George Serafeim. Is your company undervalued? Open for comment; 0 Comments.

The Many Faces of Nonprofit Accountability

Nonprofit leaders face multiple, and sometimes competing, accountability demands: from numerous actors (upward, downward, internal), for varying purposes (financial, governance, performance, mission), and requiring differing levels of organizational response (compliance and strategic). Yet is it feasible, or even desirable, for nonprofit organizations to be accountable to everyone for everything? The challenge for leadership and management is to prioritize among competing accountability demands. This involves deciding both to whom and for what they owe accountability. HBS professor Alnoor Ebrahim provides an overview of the current debates on nonprofit accountability, while also examining the tradeoffs inherent in a range of accountability mechanisms. Key concepts include: Accountability is not simply about compliance with laws or industry standards, but is more deeply connected to organizational purpose and public trust. Nonprofits will continue to face multiple and competing accountability demands, so they must be deliberate in prioritizing among these demands. A critical challenge is to find a balance between upward accountability to their patrons and remaining true to their missions. Few nonprofits have paid serious attention to how they might be more accountable to the communities they seek to serve. Juggling the many expectations of accountability—for finances, governance, performance, and mission—requires integration and alignment throughout the organization. Numerous mechanisms of accountability are available to nonprofits, such as greater transparency and disclosure, performance assessment, industry self-regulation, and adaptive learning. But leaders must adapt any such mechanisms to suit their organization. The greatest payoffs rest with strategy-driven forms of accountability that can help nonprofits to achieve their missions. Closed for comment; 0 Comments.