Whistleblowing, Communication and Consequences

Lessons from The Norwegian National Lottery

Peer Jacob Svenkerud, Jan-Oddvar Sørnes, Larry Browning

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000210651
• Edition: 1
• Topic: Business
• Subtopic: Business Communication
• Index: Business

Whistleblowing, Communication and Consequences offers the first in-depth analysis of the most publicized, and morally complex, case of whistleblowing in recent European history: the Norwegian national lottery, Norsk Tipping.

With contributions from the whistleblower himself, as well as from key voices in the field, this book offers unique perspectives and insights into not only this fascinating case, but into whistleblowing and wrongdoing in organizations more broadly. An international team of scholars use fourteen different theoretical lenses to show the complex and multi-faceted nature of whistleblowing. The book begins with an ethnographic account by the whistleblower story and proceeds into an analysis of the literature and conceptual topics related to that whistleblowing incident to present the lessons that can be learnt from this extreme example of institutional failure.

This fascinating, complex, and multi-theoretical book will be of great interest to scholars, students and industry leaders in the areas of public relations, corporate communication, leadership, corporate social responsibility, whistleblowing and organizational resistance.

The Open Access version of this book, available at http://www.tandfebooks.com, has been made available under a Creative Commons Attribution-Non Commercial-No Derivatives 4.0 license.

Part I
Introduction

1
Alone Against the Organization—Peer’s Whistleblower Story

Peer Jacob Svenkerud

Throughout most of my adulthood I had felt as if a shadow were following me—a feeling of general unhappiness about where my life had taken me, a sense of not belonging, and of failing to accomplish anything meaningful. I had spent countless hours wondering why I felt like this and thinking that the feeling would never go away, that it had simply become a part of me. It took many years before I found a solution, and my story is about that journey.

There’s a tiny bus stop between the rural towns of Elverum and Hamar, almost lost in the vast pine forests in that part of Norway. I had gotten used to stopping there daily to vomit in its solitude, hoping to quiet my churning stomach. The obstacles confronting me seemed intractable. More than two years earlier, in 2007, I had blown the whistle on the CEO of my own organization, and it had seemed to cost me as dearly as it had him.

Whenever I now pass that bus stop, I see it as a symbol of a transformative period in my life, a symbol of a place and time when the question of who I was and who I wanted to become was essential for my development.

I remember my parents telling me that unrest and impatience were always major features of my personality, so when, in 1994, I announced my decision to study abroad, in the American West, it surprised no one. It was just another sign of my impatience and need to discover. I ended up spending many years in the U.S., concluding at the University of New Mexico. By then I had been blessed to meet and work with Everett Rogers, one of the most famous communication researchers in the world. My time with him gave me new confidence, encouragement, and support. His work, on the diffusion of innovations, centered on how new practices and ideas spread, and I knew it would have a real impact, for it had already had that on me. Empowered by it, I had become more focused and ambitious, and I was now doing things that were appreciated and important. I had stumbled into the right place at the right time.

But my unrest and yearning for a sense of belonging never seemed to go away. And year after year, those feelings became ever stronger and more bothersome, whittling away at my well-being. On the surface, work was largely fulfilling, and my private life was fine. But my unsettledness pressed on me, urging me to make some sort of radical life change, possibly even like moving back home to Norway and changing my career. But what job could I find there? Having now spent many years abroad, my network was small and my knowledge of Norwegian working life was limited.

But in the summer of 1998, I was lucky to be offered a well-paying job with Burson-Marsteller, a global public relations and communications firm headquartered in New York City. Delighted, I accepted it. Soon I found myself living back in Oslo, doing enjoyable work on a nice salary, and getting to travel business class internationally. A new career path began to form, and my anxiety abated. I was living the dream.

I was involved in creating training programs in intercultural competence; giving speeches on corporate social responsibility, strategy, and leadership; and writing editorials about them. I was building a name for myself in the corporate world, even doing so well that I was invited to teach part time at the Norwegian School of Economics and serve on a university board. Headhunters kept me abreast of exciting possibilities.

My specialty became issues involving corporate social responsibility. I focused on the idea of “doing good” and “doing well” simultaneously—that is, showing that it was possible for businesses both to have a positive societal impact and make a good profit. But being a consultant meant that I essentially just moved from task to task, billing as many hours for Burson-Marsteller as possible. There was no sense of ownership or being part of a company culture. I yearned to be the leader that I was telling others to be.

So in the fall of 2000, I Ieft Burson-Marsteller and started working for the international telecommunications operator Telenor, one of the largest corporations in Norway. The work involved the responsibility of building international leadership competence by establishing a corporate university. It was exciting. The work took me all over the world. I traveled with former colleagues to places such as Bangladesh, where I wrote case studies for Instead, a French business school, about Telnor’s operations in Bangladesh and its economic effect on the Bengali population.^1,2,3 A highlight was our meeting with Dr. Mohammad Yunus, founder of Grameen Bank and co-partner of Telenor (and later a Nobel Peace Prize Laureate), in his simple office in Dhaka, a picture of Gandhi on the wall behind him. There, he said something I will never forget. We were telling him about our work on ethics and business practices. Yunus mostly listened.

“Yes,” he finally said, “I agree. Doing good and doing well seem to go hand in hand. However, remember one thing, Mr. Svenkerud: we all have to be truthful to ourselves. Corporate social responsibility and ethics aren’t something that you practice in church every Sunday by passing the collection plate. They must always be with you. They’re like a backpack you never remove.”

Consultants are notorious for not practicing what they preach, so I will forever remember his comment on consistency. His words were timely because just months later, Telenor, our company, was involved in a labor scandal in Bangladesh. One of Telenor’s sub-suppliers had been engaged in child labor. It brought the Norwegian company into crisis, and my existential crisis returned as well.

But just after Christmas 2002, I was offered a position with Norsk Tipping (NT), the Norwegian National Lottery, and promptly took it, thinking it would resolve my crisis. The company was doing exceptionally well. Led by a charismatic CEO, it had transformed, in just a few years, from a traditional operator of basic lottery games such as Lotto and classic sports-betting into a modern, high-tech enterprise with a broad portfolio. The business had skilled, mostly locally based employees and a multiplicity of products, all of which were very popular and created fantastic profits, netting billions of Norwegian kroner every year.

Not only that, but it had also received top ratings on responsibility measures, too. NT was a monopoly with a social mission: to channel gaming through one responsible operator that minimized addictive gambling by offering responsible products and funding good causes. In short, it was a company on the move and seemed a perfect fit for me. It was even headquartered in Hamar, a town just 30 kilometers from where I grew up, so I could move home and find my “place,” yet still feed my corporate ambitions.

My new job had me responsible for all internal and external communications, national TV drawings, and external sponsorships. I reported directly to the CEO and was part of the top leadership group. I enjoyed opportunities I had never imagined so close to home.

The world suddenly seemed to be more in balance. My internal unrest could take a well-deserved break. It promised to be a joyous time, with problems that could be easily solved. I had found my place.

But I was to discover a dark personal nightmare awaiting me on the horizon.

Our company’s commitment to corporate modesty was a national watchword. Gøran Persson, the former Swedish prime minister, once told me, “You know, Mr. Svenkerud, in modern monopolies you drink your coffee from paper cups!” In short, a monopoly, being granted a playing field without competitors, and getting the right to handle other people’s money, must live up to that trust by keeping a strict focus on costs and efficiency. Moreover, companies, especially publicly owned ones, had all started to realize that they were in the midst of a paradigm shift, a new age of transparency, and that society expected a degree of disclosure in which agreements, dealings, practices, and transactions were open to public verification. So corporate practices that might have been acceptable ten years ago weren’t acceptable today—and especially in an organization in which gaming risks and lots of money were prominent.

The new era forged difficult changes in many previous practices. For example, companies like the one I worked for were now expected to report on internal expenses, like fringe benefits, and to select their suppliers based on objective criteria and open competition. We were to be as transparent as possible in all our business transactions. For state-owned organizations that enjoyed a monopoly, such as Norsk Tipping, these expectations were especially important.

Given that I enjoyed the use of a corporate car, an impressive budget, and a grand office on the second floor of a bronze-plated office building, my feeling of internal conflict came creeping back. But this time the signals were different and had more force. Something was terribly wrong. Was our company synchronous with its time? Did our practices pass the acid tests demanded by the age of transparency?

One day in the fall of 2005, we received a call from an investigative journalist working for one of the largest financial newspapers. She had questions about the awarding of a 2004 contract, worth 800 million Norwegian kroner, to a small Swedish manufacturer to produce a new type of slot machine for the Norwegian market. That manufacturer, whom I knew well, basically had just one customer—Norsk Tipping. And its CEO was a close friend of my boss. The intimate ties my company had with the Swedish supplier had spurred many discussions internally, but the critical voices had been silenced. The journalist wanted to know about the personal relations between the two CEOs. And she had a specific question: Was it true that my CEO had been the best man at the other CEO’s wedding? I immediately went to ask my boss. He responded: “No! That is not true!” I reported his disclaimer to the journalist and was puzzled when she chose not to pursue the matter further. The CEO later confided to me that he was at the wedding, yes, but not as the best man. “I was toastmaster,” he said, laughing.

In the months to come, more colleagues and outsiders started to raise questions like that journalist’s; the circle around the CEO and the company kept tightening. My efforts to communicate this to the CEO seemed fruitless. Even people from top management voiced their concerns. One director of marketing said to me: “Do you know about the gardening work that is taking place at the CEO’s house? Is that something the company really is paying for?” Another employee working with logistics informed me that the CEO demanded that one of the company truck drivers was to be freed from his duties in order to serve as his private driver. An executive in the Norwegian Athletic Association asked me, “Is it true that your CEO has his own private chauffeur?”

The company was flying high on the expense side. This I knew for a fact. The many extravagant meetings and events were noticed by outsiders, including the media. Phone calls from the media asking about spending and the apparent lack of transparency became harder and harder to answer. So far, the “big” story had not emerged, but I became increasingly convinced that it was just a matter of time.

Our CEO was a very charismatic and highly public figure. His 18-year tenure gave him tremendous internal positioning and lots of supporters. He had thrived on the company’s modernization and economic success. His strong will and the intense respect directed toward him combined to make him both loved and feared.

In an endless number of leadership classes, we had often been warned of what could happen to leadership and the quality of decision-making when no one ever spoke up and challenged decisions or practices. One of our lecturers, Phyllis Perlow, had written an impactful article, “When Silence Is Killing Your Company,”⁴ in which she noted that silence in a company can be associated with virtues such as modesty, respect for others, prudence, and decorum, and that under such ingrained rules of etiquette, people will often silence themselves to avoid embarrassment, confrontation, and other dangers. Was that happening in this company?

What happens to the decision-making process in a company when critical voices are suppressed,⁵ when there is a feudal company culture that people quietly follow because the risk of speaking out seems too complicated and too consequential? Was ours a culture of pacification that invited wrong decisions because no one ever challenged the dominant voice or present practices? Did individuals who raised critical questions against their own organization or the CEO run the risk of punishment?

Our CEO was so oblivious to the issue that many had begun to question his leadership. Stories started to circulate about the leadership of the company and particularly the CEO. There were tales of excessive spending, questionable sponsorship contracts, and expensive trips to exotic locations for which suppliers paid. At first, they were easy to dismiss as coincidences, but they started to come with increasing frequency. To my distress as communications director, the CEO’s practices began to gain increasing external attention. The public and the media were on the track of “something,” and my job was to defend or redirect attention. But the nefarious activities became increasingly difficult to defend. Moreover, my knowledge of and involvement in the specifics grew only deeper over time.

It was difficult not to notice what happened to people who broke the silence about some of the practices. One individual, a middle-level manager in our security department, had repeatedly questioned work that had been done at the CEO’s house and billed to the company. “The vice CEO asked me to change the invoice so that it was untraceable,” he told me. “And I refused.” He was about to give up when he came into my office. I sympathized and told him I would attempt to bring attention to the matter. A few months later he quit the company. Others who protested came back subdued, and sometimes frightened. One manager told me, “I was told to shut up and cool down—and that I would be put in another position if I continued.” A former executive told me directly that he lost his leading position because he had asked too many questions. The situation was getting worse and worse.

Was I a part of something that was unhealthy, and that, if it became public, would be a disaster? I had been with the company for more than five years by then so the responsibility was also on me. As part of the top leadership group, I knew, given my role, about most of the controversial practices going on. The notion of being part of a leadership culture that needed to change became more and more evident, and being part of a silent culture was no longer a sustainable option. “You are responsible,” a friend told me. “You cannot be ignorant to this situation. What about your own values? How can you defend and hide these...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Contents
• List of Figures
• List of Tables
• List of Contributors
• Preface
• Part I Introduction
• Part II What Goes Wrong?
• Part III How Does It Happen?
• Part IV What Makes Whistleblowing a Risky Business?
• Part V How to Encourage Employees to Report Wrongdoing
• Part VI Epilogue
• Index