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Dodd-Frank whistleblower provisions not popular with corporate directors

By Phillips & Cohen LLP

A survey by Corporate Board Member of more than 400 board members reveals that they are not huge fans of the whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

In fact, directors don't seem to believe that many of the law's most important provisions will improve governance. Only 1% thought that financial incentives to whistleblowers would be effective. But only 18% thought executive compensation clawback provisions would help, while 11% chose mandatory say-on-pay and another 11% chose proxy access requirements as potentially effective. But 59% thought none of these provisions would improve governance.

67% responded that they thought the SEC whistleblower provisions would be detrimental to corporate governance.

One wonders whether the board members who participated in the survey are familiar with the False Claims Act. Since the whistleblower provisions were enhanced in 1986, the FCA has done much to improve enforcement and has increased compliance. The FCA has proven to be an effective deterrent against fraud.

Full post as published by False Claims Act - Qui Tam on October 17, 2010 (boomark / email).