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Edited by Stephen Tully
Chapter 14: Whistleblowers: The Critical Link in Corporate Accountability
14 Whistleblowers: the critical link in corporate accountability Dana L. Gold Introduction Focus on corporate wrongdoing has been unyielding since the now-infamous accounting fraud scandals of Enron, WorldCom, Tyco, Adelphia, Global Crossing and others eclipsed the news at the end of 2001. Despite the heightened attention on corporate accountability, scandals continue to emerge, ranging from fraud in the mutual fund industry to the international scandal of Parmalat in Italy to improprieties in the US government’s distribution of federal contracts to Boeing and Halliburton. Dramatic responses to corporate fraud in the form of sweeping US legislative reforms (specifically the Sarbanes–Oxley Act of 2002, passed to restore investor and consumer confidence in the corporate sector), aggressive prosecutions of top corporate executives, revisions to stock exchange listing requirements that mandate specific corporate governance reforms by publicly traded companies, and increased activism on the part of shareholders, board directors and stakeholder groups, have all thrown into question deeply held presumptions about market economics, ideal corporate governance structures and the role of corporations in society generally. Corporate wrongdoing, despite the recent attention, is not new. Egregious examples include the excessive overcharging of materials by defence contractors in the 1980s; the environmental and health disaster in Bhopal, India caused by Union Carbide (now part of Dow Chemical) when its pesticide plant’s cooling system failed, causing a gas leak that killed 8000 people in three days and poisoned more than 500,000; the deliberate misrepresentation by tobacco company Brown & Root of the inclusion of deliberately addictive...
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