"We go back to our default reactions, where we take a short-term view," he said. "It's really a question of maturity. Under stress, we tend to act more like children than adults."
Not surprisingly, the discussion brought Palmer's case to mind, and I raised the topic of whistleblowers. I noted that there have been so many cases of people summoning the courage to do the right thing and speak up, and all too often they're demonized by the company. With Infosys in mind, I asked Dattner, what needs to happen in order for a company to flip that culture around so that a whistleblower is listened to and respected rather than ignored and reviled?
"[Former General Electric chairman and CEO] Jack Welch would always say you're in much more danger if you conceal a mistake than if you make a mistake," Dattner said. "Part of it is having leaders who will say they're going to create an environment that's safe for people to come forward, and unsafe for people to stop other people from coming forward. That comes from the top."
Dattner went on to talk about a program at Prudential Financial called, "Safe to Say."
"It's a critical part of their culture that people feel comfortable speaking up or pushing back, and that they know if they do blow the whistle they're going to be safe," Dattner said. "And if you directly or indirectly try to threaten or thwart somebody from speaking up, you're going to get into a lot of trouble very quickly."
It was at that moment that it hit me. That's when I realized what the one thing is that troubles me the most about the Infosys case. I remembered a post I'd written in November headlined, "Examining the Prospect of the SEC Taking Action Against Infosys." In that post, I had written about Infosys' own Whistleblower Policy, which it outlined in its 2010-2011 Annual Report (Form 20-F) submitted to the U.S. Securities and Exchange Commission:
Our Audit Committee has also adopted a Whistleblower Policy wherein it has established procedures for receiving, retaining and treating complaints received, and procedures for the confidential, anonymous submission by employees of complaints regarding questionable accounting or auditing matters, conduct which results in a violation of law by Infosys or in a substantial mismanagement of company resources. Under this policy, our employees are encouraged to report questionable accounting matters, any reporting of fraudulent financial information to our shareholders, the government or the financial markets any conduct that results in a violation of law by Infosys to our management (on an anonymous basis, if employees so desire). Under this policy, we have prohibited discrimination, retaliation or harassment of any kind against any employee who, based on the employee's reasonable belief that such conduct or practices have occurred or are occurring, reports that information or participates in an investigation.
Infosys had done precisely what Prudential had done. It had established a program under which its employees are encouraged to speak up and report questionable activity and violations of the law, and ensured they would be kept safe by prohibiting anyone from engaging in retaliation or harassment of any kind. It was reinforced by Jeffrey Friedel, Infosys' corporate counsel, who encouraged Palmer to file a whistleblower report, and promised he would be protected. So Palmer summoned the courage to take the leap of faith that Infosys would be true to its word. In October 2010, he filed the report.
What happened next is what's so especially troubling. Infosys wantonly, inexcusably, shamelessly, senselessly pulled the rug out from under Palmer. He was chastised and vilified for not being a "team player." He was ostracized and locked out of Infosys' systems. He was benched, stripped of any opportunity to work on a project, forced to sit at home while his skills atrophy and his compensation takes a beating. Think about that. Palmer was benched in April, so it's been almost a year. Think what that would be like.
So what bothers me the most about this case is Infosys' treachery. The Whistleblower Policy it supposedly put in place and touted to shareholders and the SEC doesn't exist. It's nothing but a wisp of smoke and a collage of mirrors that have trapped Jay Palmer in a nightmare that other employees who have intimate knowledge of the visa and tax fraud are loathe to endure. The treachery is nauseating. That's what I hate most about this case.