Whistleblowers

• Author: Anita Indira Anand
• Pages: 123-130

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Whistleblowers

In the story of Enron’s failure, Sherron Watkins looms large. She was

the Enron vice president who wrote an anonymous memo to the

chair of Enron, Kenneth Lay, raising concerns about Enron’s account-

ing and asking if the rm had become a “risky place to work.” Wat-

kins has been called a whistleblower, even though her memo did not

become public until congressional investigators released it following

Enron’s ling for bankruptcy.

Nevertheless, Watkins identied accounting issues at Enron — in

particular, the accounting irregularities relating to o-balance

sheet transactions — and approached management so that it could

try to x them. Her actions were a service to the capital markets and

to Enron’s investors. But for many who nd themselves in the pos-

ition of having to decide whether to come forward with concerns

about possible wrongdoing, the fear of losing their jobs will oen

cause them to keep quiet. Indeed, Sherron Watkins at one point

said she feared for her life.

In Canada, the Criminal Code contains provisions prohibiting

employer retaliation by disciplining, demoting, or otherwise adversely

aecting the career prospects of an employee. Such retaliation by an

employer is punishable by a prison sentence of up to ve years. But

while this protection is an important one, it falls short of actively

1 Dan Ackman, “Sherron Watkins Had Whistle, But Blew It” Forbes (14 February

2002), online: www.forbes.com/2002/02/14/0214watkins.html#122426e032b9.

2 Criminal Code, RSC 1985, c C-46, s 425.1(1).