Estelle Metayer is president of Competia, a corporate director and adjunct professor at McGill University
Whistle-blowing is an effective, well-known mechanism allowing any employee to signal wrongdoing to the appropriate authorities for investigation. Like the whistle for the referee in sports, it provides an immense power to a single person to signal a game has to stop in order to figure out what happened. With the ability for an individual to “blow the whistle” in the public space through social media, what happens when we now have multiple referees who can stop the game at any time?
Vancouver-based Hootsuite recently found out the hard way. An employee took to Twitter on Sept. 23 to express her anger that Hootsuite had accepted a contract with U.S. Immigration and Customs Enforcement (ICE). The employee, Sam (@samelaanderson), had fewer than 4,000 followers on Twitter, but her post garnered more than 11,000 retweets and 34,000 likes.
Within 24 hours, a full-blown crisis ensued. The company at first denied the existence of the contract, though reporters quickly found the details online at a U.S. government awards management website, which stated that the contract was awarded through a third party, FCN Inc. Lack of transparency in social media never ends well, as misleading statements can easily be challenged in minutes, ensuring the crisis rapidly spirals out of control. By 9 p.m. that evening, according to news reports, Hootsuite chief executive Tom Keiser announced internally that the company would pull out of the contract, worth more than US$500,000, with a two-year extension option. He confirmed the decision in a tweet the following day.
Since attracting and retaining talent is key in the competitive tech market, this “ICE-capade” may become more than a PR problem for Hootsuite. More importantly, the company is a Certified B Corp., the new breed of corporation committed to meet the highest standards of ethics, public transparency, and accountability and to balance profit and purpose. The controversial ICE contract was at such odds with the culture the company espouses, that it is not surprising it struck such a sensitive chord.
Executive teams and boards around the country would be wise to pay attention to the bigger picture emerging here: social-media whistle-blowing. When internal governance systems fail, employees may feel they have no choice but to turn to the public space to spill the beans.
Social-media whistle-blowing is not completely new. In 2017, Uber’s CEO was forced to resign after a former engineer detailed what she described as harassment in a blog post that went viral. In 2014, an employee at web browser Mozilla voiced concerns on Twitter about the new CEO Brendan Eich who had once made a political contribution to an organization seeking a ban on gay marriage. Mr. Eich decided to resign within a few days.
Social media as the new whistle-blowing channel will be hard for companies to stop or circumvent. It challenges four accepted traditions in corporate governance systems:
From anonymity to public protection: To protect whistle-blowers, companies and organizations usually set up secure phone lines to allow anyone to report wrongdoing anonymously. That discreet process can now easily become public. In fact, it is the very visibility of their posts that affords a revealer some protection. Sam at Hootsuite posted, “If I get fired for speaking out about this, it will be purely retaliatory in nature.”
From internal to external: Whistle-blowing incidents are usually communicated directly to the board of directors and executive management. With social-media whistle-blowing, however, the information becomes public, often before it has even been verified or reported to the board. The problem is, in North America, a 2018 survey showed that only 54 per cent of boards were monitoring social media for adverse publicity (this percentage drops in Canada if I extrapolate results from a survey I led last week with a group of corporate directors in Vancouver).
From quarterly communications to rapid response: A study by multinational law firm Freshfields Bruckhaus Deringer shows that news of a crisis spreads internationally within an hour over social media, yet on average it takes 21 hours for companies to issue meaningful external communications to defend themselves. Unless a company has already scripted a response to a potential online crisis and vetted it with its board in advance, it will never be able to react fast enough.
Employees who leverage social media to raise concerns are often doing it with the full understanding they are breaking many rules: non-disclosure agreements, internal codes of ethics et cetera. Yet, maybe as a trait of the increasing millennial work force, they are often willing to choose disobedience for the greater good.
Boards beware
Social-media whistle-blowing is quickly becoming an accepted vehicle to expose organizational wrongdoing. For public companies, boards and their audit committees ought to be held responsible for monitoring social media for whistle-blowing reports with the same diligence as internal reporting. After all, the board is responsible for overseeing the company’s reputation and either “knows or should have known.”
Few boards are equipped to do this today. Some are starting to tap into an emerging tool kit that includes social-media analytics provided by companies such as Sysomos, Canadian Radian6 (now part of Salesforce) as well as crowdsourcing artificial intelligence software such as that developed by Ottawa-based CrowdBridge, but they remain the exception. Others are adopting new practices: They receive a daily dashboard of social media mentions of their organization or even a regular update through their human resources committee on issues raised on Glassdoor.
This new reality will deeply challenge boards: Public denunciations are not conducive to good decision making. Worse, with the spreading of “fake news,” who will be the judge of wrongdoing: the board or the public? As governance increasingly becomes a public affair, this dilemma will only get more complex in the months ahead. Companies will need to disrupt their practices to protect their reputation before it’s too late.
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