WCOA 2018: Truth telling - WCOA Sydney 2018 | The Best Accounting Conference

International Convention Centre, Sydney Australia  |  5-8 November 2018

Whistleblower’s five-step plan to deal with corruption

Wendy Addison’s experiences have taught her lessons on how to call out corporate fraud, writes Alexandra Turner-Cohen.

WCOA 2018: Truth telling
Wendy Addison (second from right) with Mary Inman, Sylvain Mansotte and Michael Woodford discuss "The truth about truth telling"

South African whistleblower Wendy Addison says accountants often have a lot to lose when they come across corporate corruption.

“In-house accountants are the most at risk [of discovering corporate fraud],” Addison said in an exclusive interview. “Because accountants are closest to the money.”

Addison, a chartered accountant, lost her job when she blew the whistle on corporate fraud and ended up begging on the streets with her 12-year-old son.

Telling a company that someone has committed fraud “is a bit like that difficult conversation you have with your teenage children about sex”, Addison said.

As a result, Addison founded SpeakOut, SpeakUp, an organisation that teaches people how to have courageous conversations. She has formed a five-step guide for potential whistleblowers:

  • Consider if you’re the right person to speak up. Do you have too much “skin in the game” – too much at stake, too much to lose? Are you already an outlier in the company?
  • Report the problem internally, talk to your direct manager.
  • Use the right language, appeal to shared experiences and talk conversationally – not in an accusatory way.
  • Bring someone with you when speaking to the manager – even if they don’t say anything, their presence changes the power balance.
  • Report externally as a last resort (if you report externally, save your letters of appraisal in case you’re dismissed).

Addison was international treasurer for South African company LeisureNet. In 2000, she discovered the company was illegally sending hundreds of millions of dollars to a New Jersey account.

“I began to ask questions about this and I was dismayed that I was met with this purposeful ostracisation,” she said.

Addison referred the matter to an external fraud organisation, and LeisureNet was forced to shut down and its executives were put on trial.

“I was fired from my job and I lost my career,” she said. “But what was worse was I could have potentially lost the life of my son. We began to receive death threats, and at one stage they sent a driver to my son’s primary school to fetch him, just to show me they could.”

Addison moved to the UK in what she called “self-imposed exile”, and became group treasurer at a British health club. “In a sheer twist of fate”, she said, the British health club she worked for was bought by LeisureNet, and she was dismissed. Addison suspected her sacking was part of the conditions of purchase.

She was unable to find another job because she believed she was “untouchable”, having been fired from the much-loved British company and becoming a known whistleblower. Her recruitment agency suggested she try another career, such as becoming a florist, and cut all associations with her.

A single mother, Addison and her son begged on the streets for six months to survive. “All I was thinking was ‘I want to die’,” she said.

Eventually, Addison was called back to South Africa to testify at the trial of two executives. They were sentenced to jail in 2007. “I’m one of the few whistleblowers who got justice.”

Addison obtained a degree in Social Psychology and Neuroscience of Decision Making at Stanford University to understand more about people’s inability to have courageous conversations.

She said “diversity in accounting, and any profession for that matter, is important” for people having the courage to speak out.

“Being a little bit different from the group makes it easier to say what needs to be said. I had this name – ‘Wendy the Wild Card’ – because I was the only woman in the senior executive team [of LeisureNet]. I was an outlier of sorts, which is important because it gave me leverage to speak up.

“The social science research shows if you have less skin in the game – less at stake – [it’s] easier.”

Whistleblowing is hard, she said, because it “goes against our need for social cohesion, to belong to the group, to remain loyal to your group”. Her organisation trains people to deal with these situations. “We know from social science you have between five to 10 seconds before your conversational partner shuts down.”

Addison teaches people the language they should use in those crucial few seconds. “When you’re highly pressurised – when you’re afraid, when you’re angry – you want to go in there like you’re a bull with a fly in the ear instead of building a rapport with the person you want to speak up to.”

She said it’s important people in these circumstances build rapport and appeal to shared experiences with their manager instead of launching into the crux of the problem.

“Physical courage is easier,” she said. “But moral courage is voluntarily being vulnerable, which is very difficult.”

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