American’s greatest living playwright died yesterday as Sam Shepard passed away from Lou Gehrig’s disease. According to his obituary in the New York Times (NYT) “In Mr. Shepard’s plays, the only undeniable truth is that of the mirage. From early pieces like “Chicago” (1965), written when Mr. Shepard was in his early 20s and staged in the margins of Off Off Broadway, to late works like “Heartless” (2012), he presented a world in which nothing is fixed. In plays like “True West” (1980), “Fool for Love” (1983) and the Pulitzer Prize-winning “Buried Child” (1978), he dismantled the classic iconography of cowboys and homesteaders, of American dreams and white picket fences, and reworked the landscape of deserts and farmlands into his own shimmering expanse of surreal estate.” His plays brought a “feeling of uncertainty” that “was translated into dialogue of an uncommon lyricism and some of the strangest, strongest images in American theater.”

Although more reluctantly, he was a laconic movie star; a worthy successor to Gary Cooper in such roles as Days of Heaven (1978), The Right Stuff (1983) and Baby Boom (1987). In The Right Stuff he portrayed one of the underlying book’s heroes, fighter and test pilot Chuck Yeager. For this role he received an Oscar nomination. Perhaps the great tribute came from his fellow actor Ed Harris who was quoted as saying, “I loved Sam. He has been a huge part of my life, who I am, and he will remain so.”

Sam Shepard seems an appropriate introduction into today’s topic of whistleblowers, their unmasking and retaliation which is currently being discussed in the United Kingdom. It all stems from the actions of Barclay’s Chief Executive Officer (CEO) Jes Staley and his attempts to unmask an internal whistleblower. The matter involved a letter forwarding allegations against another Barclays officer, Tim Main, who Staley was instrumental in bringing to Barclays. They had a long time professional friendship which began when they both worked together at JP Morgan. The anonymous tipster alleged Main had a history of substance abuse in his past. Staley initially order the company’s security department to unmask the whistleblower.

This initial attempt was rebuffed as inappropriate. Staley then made a second request to the corporate security department who involved the United States Inspection Service. Nothing came from this use of US authorities and at some point, thereafter a Barclays employee notified the inappropriate conduct (ironically through the internal company hotline) to the Board of Directors who commissioned an internal investigation.

This type of direct CEO involvement in a clearly unethical, if not illegal, act is troubling to any international business, compliance professional or company employee. To have a CEO engage in behavior which is so clearly outside the norms of any espoused behavior is beyond troubling. I guess Staley had not had time to read the part of the Barclays’ Code of Conduct (the Barclays Way) which states, “No employee will experience retaliation in any way as a result of reporting an issue in good faith.”

Yet in the UK, this action may undo attempts to protect and compensate whistleblowers who bring forward credible information of wrong-doing. In a Financial Times (FT) The Big Read article, entitled “Whistleblowers Count the Cost, Martin Arnold and Caroline Binham reported that there is concern Staley’s actions have softened efforts to have whistleblowers who report wrongdoing step forward. They quoted “Dino Bossi, former head of investigations and whistleblowing oversight and policy at Barclays” who described “Staley’s actions as “completely inexcusable”. He adds: “It takes years to build the right trust and culture and it can be destroyed with a single act.””

The article went on to note, “The Financial Times has spoken to more than two dozen regulators, investors, bankers, lawyers and whistleblowers about Mr Staley’s actions. Many of them believe he has damaged confidence in the principle of whistleblower protection, which is vital if people are to be encouraged to come forward.” Finally, Jo Keddie, a partner at Winckworth Sherwood LLP, stated, ““Using a senior position to try and interfere, wrongly, in a whistleblowing investigation or seeking to identify a whistleblower whose identity should remain anonymous or confidential, goes against the tenor and spirit of the SMR.” [SMR is a report designation.]

To try and undo some of the damage caused by Staley’s forays, Barclay’s has hired a “Whistleblower Champion” who is non-executive Board member who also chairs the Board’s Audit Committee. Even now Barclay’s Chairman, John McFarlane, has complained “there are too many baseless complaints from unhappy employees.” When both a CEO and Chairman have such ideas on the propriety of hotline complaints, one might wonder if there will ever be any credible hotlines reports coming forward. As the head of the UK Financial Conduct Authority (FCA) noted, “whistleblowers need to be confident that this is a thing you can do, and do safely.”

Staley, for his part, pled ignorance that his actions were in violation of any laws, industry norms or even company policy. It certainly says quite a bit about the ethical nature of a company’s culture when the CEO claims he was unaware his actions violated the Code of Conduct. The FT piece ends with a parable from Ian Foxley, a whistleblower against Airbus who fled for his life from Saudi Arabia. Foxley said, ““Whistleblowers are branded as outside the pale; they’re not to be trusted, they’re not part of the team: that is the current marketing of whistleblowers in this country, and it needs turning on its head.”” More ominously, Foxley noted, “I think whistleblowers are the boys who tell the emperors they’ve got no clothes on. What Hans Christian Andersen never tells you is what happened to the little boy.”

 

This publication contains general information only and is based on the experiences and research of the author. The author is not, by means of this publication, rendering business, legal advice, or other professional advice or services. This publication is not a substitute for such legal advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified legal advisor. The author, his affiliates, and related entities shall not be responsible for any loss sustained by any person or entity that relies on this publication. The Author gives his permission to link, post, distribute, or reference this article for any lawful purpose, provided attribution is made to the author. The author can be reached at tfox@tfoxlaw.com.

© Thomas R. Fox, 2017

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