Twenty-three years after Enron declared bankruptcy, little has changed regarding the culture of whistleblowing and the reporting of internal fraud. Despite 56% of finance professionals reporting that they have either spotted or suspected fraud within their organizations, the majority (81%) stay silent.
As seen by the recent devastations related to the Boeing scandal, today’s whistleblowers are still facing immense pressure, tribulation, and opposition for coming forward—and in extreme cases this pressure leads to truly tragic consequences for individuals.
In 2001, I became a whistleblower, warning the CEO of Enron of suspicious accounting activity. In doing so, I exposed one of the largest corporate frauds in history. I didn’t expect a gold medal—I was just doing my job—but ended up jeopardizing not only my job, but my career, livelihood, and reputation. In the fallout of my decision to come forward, I was accused of trying to destroy Enron, called a troublemaker, and stripped of all work assignments. Despite doing the right thing, I later learned that company executives had tried to fire me after I first alerted them of the issues. I was subsequently shunned by my peers and labeled as a “snitch.”
Whistleblower intimidation
When you look up the term whistleblower in the dictionary, synonyms include betrayer, snitch, rat, and tattletale—all negatives to describe someone who did the right but hard thing. And sadly, this is an accurate representation of how whistleblowers are not only perceived but treated. Data from Medius, a fraud detection software company I've partnered with, shows roughly a third (32%) of finance professionals have seen firsthand whistleblowers being called names to their face or behind their backs due to their reports. Name-calling is just one example of the bullying and backlash that whistleblowers face, and one of many reasons finance professionals are scared to report internal fraud.
Everybody knows that the right thing is often the hardest thing to do, and it is almost never easy or straightforward. Whistleblowing involves a power dynamic favoring the organization over the individual, compounding the problem and making it even harder for employees to speak up. This matter is made even worse by the performative cultures within modern organizations that protect whistleblowers in theory, but not once a whistleblower comes forward to actually report.
From my own experience, and now having spoken to many people with a similar one, when an employee first becomes aware of something suspicious or fraudulent, they find themselves staring off a cliff edge as they mull reporting it. Fears of isolation and not being believed immediately come to mind, making employees question if it’s better to just “be a team player,” keep their heads down, and ultimately ignore their concerns to stay safe.
While a common fear that consumes those considering blowing the whistle is workplace retaliation, it doesn’t stop there. Nearly half (48%) of employees say the legal system simply does not adequately protect whistleblowers.
Empowering whistleblowers—for real
For individuals to feel confident about coming forward, organizations must value whistleblowers, fostering a culture of protection and providing a community of support. It’s also critical that whistleblowers feel empowered to report and have tangible evidence to support the fraud they’ve spotted or suspect. A resounding 93% of financial professionals reported that they would feel more confident and comfortable about blowing the whistle and reporting fraud if they had evidence. This evidence can come courtesy of AI tools that analyze thousands of previous transactions to identify anomalies that may represent suspicious or fraudulent activity.
In the years since I became a whistleblower, I’ve dedicated myself and my career to advocating for whistleblowers, building communities, and encouraging professionals to speak up and do the right thing. This is why I’ve dedicated my career to raising awareness of struggles whistleblowers face and the obstacles organizations may have in place that create a difficult environment for employees to come froward. While whistleblowers may feel alone, they are part of a powerful movement.
Sherron Watkins is a leadership and ethics advocate and is known as the Enron whistleblower. She is an internationally recognized speaker on the topics of ethics, corporate governance, organizational behavior, and the toxic label of whistleblower.
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