Whistleblowing and the Public Director: Countering Corporate Inner Circles

Abstract

Working Paper No. 03-17, 2002) (citing early warnings about Enron provided in the financial press). 8 See C. FRED ALFORD, WHISTLEBLOWERS: BROKEN LIVES AND ORGANIZATIONAL POWER 17 (2001) (citing a definition of whistleblower as "one who (1) acts to prevent harm to others, not him or herself, (2) trying first to rectify the situation within the framework provided by the organization, (3) while possessing evidence that would convince a reasonable person") (citing MYRON PERETZ GLAZER & PENINA MIGDAL GLAZER, THE WHISTLEBLOWERS 4 (1989)). 9 There is rich literature on the typical harsh treatment that a whistleblower can expect. See Elletta Sangrey Callahan & Terry Morehead Dworkin, Who Blows the Whistle to the Media, and Why: Organizational Characteristics of Media Whistleblowers, 32 AM. Bus. L.J. 151, 165 (1994) ("When a practice [in an organization] is questioned, there is commonly a tendency to respond with "retrospective rationality" and a marshalling of forces to justify the challenged decisions. The flow of information may be restricted, and there may be attempts to "kill the messenger." The wrongdoer's success in resisting change, suppressing information, and retaliating depends on his organizational influence.") (citations omitted). On the problems suffered by whistleblowers, see generally TERANCE D. MIETHE, WHISTLEBLOWING AT WORK 73-78 (1999).

The case for professional boards: an assessment of Pozen's corporate governance model

“…With six of seven directors independent, attracting five who have industry specific experience (excluding the independent director with "financial expertise") would be challenging -and perhaps unproductive in the longer term. Such specific "industry expertise" boards can be susceptible to the perils of "groupthink" (Fanto, 2003). According to Janis (1972, p. 9), groupthink is "a mode of thinking that people engage in when they are deeply involved in a cohesive in-group, when the members' strivings for unanimity override their motivation to realistically appraise alternative courses of action."…”

Looking beneath the surface

“…Just as individuals are subject to cognitive weaknesses in decision making, research suggests that these flaws can be amplified in the group context (Fanto, 2004; O’Connor, 2003). In particular, it has been shown that group dynamics can bind group members together and blind them to their failings and excesses.…”