Douglas Linares Flinto – Chairman & CEO at Brazilian Business Ethics Institute
Fifteen years ago, I lived through a professional experience that I imagined was something rare in the business world. To fulfil the words and spirit of the code of ethics of one of the largest oil companies on the planet, I had to report to management a multi-million fraud and corruption scheme in the regional sales department, for which I had temporarily assumed responsibility.
The illegal activities and illegalities I had discovered also involved various types of conflicts of interests and even the issuing of ‘cold invoices’. According to my surveys, the looting of the company’s coffers was more than $20million a year.
Despite the seriousness of the facts, the commercial director and the general manager of internal audit, didn’t give me any guidance on how I should proceed from that moment. Nor was I praised for my attitude in guarding the name, the reputation and the equity of the company. I imagined that situations of this magnitude should be conducted in this way to ‘protect’ the whistleblower.
A few weeks later, during my vacation, the company conducted an ‘internal audit’. No breach of the code of ethics had been verified and no misappropriation of money had been proven. When I returned to my functions, I was fired. When I appealed to the ethics committee of the company’s Brazilian subsidiary, the CEO sent me an answer. By the content of the letter, it was evident that the scheme of fraud and corruption that I had reported had metastasised throughout the company.
So, I asked the board to help me because it is the ‘highest authority’ in and out of the corporate walls. The board is composed of the shareholders’ representatives as well as the chairman and the global CEO. It is the members of the board who determine the guidelines for the executives to conduct the business. The board is also the personification of the ‘corporate governance’. And the board is much more than all of this. The board is the guardian of ethics and must ensure compliance with the company’s code of ethics.
Investigations and lawsuits
As a reply to my request, the board authorised the chief legal officer to enter a (frivolous) lawsuit against me and the Brazilian Business Ethics Institute, demanding an indemnity of $30 million for hypothetical slander and defamation. And to disqualify me and mislead an Italian magistrate, the company used a ‘deceitful version’ supported by the senior vice president of internal audit that accused me of lying and having a ‘non-collaborative and reticent’ attitude to the company’s undercover investigation, which breached the relationship of trust and resulted in my dismissal. That is, the company ‘killed’ the whistleblower in Brazil and tried to do the same in Italy, turning the whistleblower from a hero into the villain.
After losing in the first instance and not fulfilling a pre-established deal, the company appealed the sentence and the next hearing will take place in 2018.
Sometimes, incredible as it may seem, the whistleblower is labelled, pejoratively, as the snitch of the story for handing in their partners or superiors and has their loyalty questioned by everyone. But, most of the time, people don’t use the most effective corporate tool to detect ethical problems: the channel of complaint. Many of them don’t feel comfortable denouncing for fearing that the matter won’t be handled with the necessary confidentiality. Many imagine that nothing will be done and no one will be punished.
“The honest and incorruptible employee is not respected, is not promoted and is always criticised. But the dishonest and sly employee can always climb the rungs of the corporative hierarchy”
Others keep quiet because they know that the biggest corporate law is the one that says: “They give the orders. You obey them.” Some others act wanting to take advantage, even if someone or the company itself is harmed. Whoever does not do it is called a ‘fool’ and the one who gets the admiration is the smart one that defrauds what the company can’t protect. The honest and incorruptible employee is not respected, is not promoted and is always criticised. But the dishonest and sly employee can always climb the rungs of the corporate hierarchy.
Because of this type of culture, it is evident to everyone within the company that the ethical employees are fools and the rogues are admired. But, most of the people are still intimidated and keep quiet about stories like mine that had harmful consequences for those who decided to blow the whistle, for those who sounded the alarm: retaliation, loss of job and being vetoed in the labour market.
Compliance programmes weren’t capable of changing this sad reality and the inconsistent situation with acceptable standards of ethical conduct. The employees will receive the code of ethics, attend the ethics and integrity training, they will say ‘yes’ to everything and nothing will change. Not even in countries where there are effective whistleblower protection laws, such as the US and the UK, have they been able to end once and for all with the silencing of the whistleblowers.
I am pretty sure that if stories such as mine begin to emerge from the underworld of business and the whistleblowers are encouraged to denounce and confront unethical companies, that transparency, honesty, integrity, character and ethics will become the true corporate values. It would have the power to engage employees around the world with a noble and commendable purpose, capable of achieving the corporate mission that will add value to the investors and shareholders, customers and consumers, partners and suppliers, and reflect on productivity and profit, on risk mitigation and improvement of reputation, ensuring business continuity.
I did what was right and I was the victim of my own complaint. I had my corporate career destroyed by an unethical company that should protect me as it is imperative in its own code of ethics. Do I regret anything? Quite the contrary. I would do it again. Because doing the right thing, because acting ethically and with integrity, makes our life worth living!
I also make the words of Malala Yousafzai – the young advocate for women’s education, who was shot on her way home from school – my own: “I tell my story not because it is unique but because it is not” and I hope my story can be served as an example, motivation and inspiration to other whistleblowers who are being silenced and their careers and reputations buried around the world by companies that don’t respect their codes of ethics, by employees and executives who steal corporate coffers and the board that pretends nothing happens.
About the Author:
Douglas Linares Flinto career spans 40 years in petroleum distribution companies of petroleum and ethanol, having worked for the Anglo-Dutch SHELL, the Brazilian IPIRANGA, from Grupo Ultra, and the Italian AGIP, from Eni Group. During those years, he had the pleasure of working in various segments of this market: automotive, consumers, lubricants, CNG, convenience stores and franchises.
In 2003, Douglas founded the Brazilian Businesses Ethics Institute. Its a nonprofit association of private law, with its headquarters in Campinas City, São Paulo State, Brazil.
The mission of the institution is “to foment the Ethics in the corporate and educational field, by the construction and dissemination of the best practices, allowing a more ethical future and, naturally, Sustainable” and the view is “to be a reference in promoting the Ethics, influencing and improving the way of doing business in Brazil”.