EP45: What are the lessons learned from the Wirecard fiasco?

good morning and welcome to this next episode of governance dialogues a program that for the viewers that been following us uh know is focused on anything governance related where we've had conversations with Regulators investors uh board members and other experts in the in the world of governance and one topic which we haven't yet explored in in these dialogues is is um a question of uh whistleblowing which is of course integral to uh the Integrity of of Corporations worldwide and indeed you

know if you look at International standards of course uh including the oecd principles of corporate governance which were which was uh which revised just very recently but um which always include an element on whistleblowing and the importance of protecting whistleblowers as part of the uh defense mechanism um that companies need to to have to promote Integrity uh whistleblowers of course in principle should report should have access to the management but also um a dotted line to the board or at

least that's what most governance instruments recommend um and the ability to communicate their concerns without let's say any any fear of repercussions getting fired and whatnot and we also know that is not necessarily the case um uh in in reality and today I actually I invited um pav Gil who was The Whistleblower in the wir card case to speak to us about his experience at the wir card which I think is also very relevant to ongoing or past whistleblowing cases at Boeing and many

other companies where whistleblowers actually continue to face uh real challenges having their voices heard so fa it's such a pleasure to have you on this program uh today thank you for joining us thank you for having me so just maybe a few words about if I'm say and and of course please correct me if I get any any of the facts wrong and and you have a clearly a more intricate picture of what happened at wire card but for the benefit of of of for our audience Ward was a financial payments

and payments and financial services company that operated well was headquartered in Germany and actually was a a very short-lived actually story if we look at corporate history of wiard it's a company that was launched in 99 and it filed for bankruptcy about 20 years later um and it has all the elements of corporate Saga misdoing of Auditors uh let's say leniency if not to say um sloppiness of uh the regulator um uh and in and as as we'll discuss in the

in this episode the uh kind of um unwillingness of the company to to hear out um whistleblowing concerns and path actually brought these whistleblowing concerns to I believe the financial times investigation which came out with a with an article um that you know with time led to the whole unraveling of wire card which to my mind along with perhaps Enron which I also witnessed um in my first years of career at and Arthur

Anderson uh shows was one of the biggest corporate fiascos and and integrity fiascos in in modern corporate history so I think it's a very interesting um uh topic to to to look into or a case to look into so P let me just sort of um start off with asking you kind of more general question and getting your thoughts on from on the key governance failures that you saw at wiard and how you kind of um fora them and and then

eventually what lessons can be drawn from from this experience for other companies why is it relevant to others yeah the first things that I noticed was how thin the whole control functions uh aspects of the business was so we talk about corporate governance uh I was the 13th hire in the legal and compliance team and then if you look at the uh internal audit side they only had I think 1.5 employees CU .5 because one was part-time eventually they got

another one uh if you look at the board the board was historically the executive board was historically three people Marcus Brun the CEO um the CE o Yan marcelik who's currently on the run and Burke harl who was the CFO so when I joined they finally had a fourth board member uh Susanna SLE and there were rumors that she was hired due to diversity reasons and and not more than that so you know it was very thin

corporate governance structure you're talking about a company that was listed on the Dax index you know billions of Euros in market cap but yet you only had that kind of thin layer uh looking after as a Control Function setup uh the entire organization from South America North America Europe Asia and Australia New Zealand well it's interesting because in Germany of course in and those those who are listening to us probably know but there is executive board and there's a supervisory board

and you spoke about the executive so may ask what what happened with the supervisory board because ultimately if if we are are are blunt the Box stop with them right so did they have a a role in in the whole story I mean apart from I think the late supervisory board joines um the historically the supervisory board was always known within the company to be friends uh and friendlies I would say of the executive board so they were strong supporters of

the company um I don't think they had a very interactive uh oversight role in that sense as to how you would assume the supervisory board had Marcus Brun and the executive board had a lot of power and sway over them often times he would just overrride certain suggestions from their side particularly if you understand how the company crashed um there was for example a board a new board member supervisory board member Dr Anastasia laak and she really tried her

very best to um you know get certain things done uh but Marcus Brown was unilaterally just going against that and in fact trying to expose the supervisory board member as trying to take over his job instead and other crazy stuff and we've seen the similar stories I think we in one of the episodes we talked about any an Italian company where there was a a governance expert Karina leak that was appointed and then you know everyone turned against her and

also tried to sue her and she had to fight a ble though she was a board member I think in in that case it wasn't whistleblowing case so it's interesting you you you mentioned about about um Executives having a sway over the board because typically it's um it's it's more of of a concern at least in in our work with with un un unitary situation board so when they're not a dual a dual board as you have in Germany where there are many Executives and they kind of control maybe the board and then there have been in all fairness a number of governance

instruments that were introduced like separation of the the CEO and chair roles which in most places except for the US sort of works uh and and other mechanisms that limit executive presence on the board so it's it's a little bit I suppose for for for for for for a general year it's a little bit unusual to hear of a supervisory Board of a company being hostaged to to management interest yeah but that was the case with Ward I mean I think generally there is a problem with um

even boards per say and non-executive directors for example in Singapore this is one of the issues that we seen in the last several months if not you know the last two years there is this tendency where uh people just be non-executive directors without understanding what that entails right like their exposure their duties fiduciary duties or even you know legal duties in that sense um they just think that let's just sit on these boards and get like a fee um but

then they don't understand that when something goes terribly wrong they get exposed directly yeah and some of the Regulators have suited it's rare but there are suits against like against board members for breach of their fiduciary duties and we see if you look even in Emerging Markets there's a kind of a growth of um of insurance like board member liability insurance and whatnot but in your particular case one um question that that jumps to mind is of course in the role of the board where the reports started to come out when you sort of

spoke out and even I think previously the were some um some reports by by research firms like zatara and others that talked about the fact that or spoke to the fact that there is kind of uh let's say mismatching of assets and liabilities and whatnot and what what was the reaction that you received I mean I I suppose your report finally ended up with the board was there some sort of Reckoning at that point or did did the management the board continue to play defensive and say this is

irrelevant this is not sure no they took a very aggressive approach so when the general counsel found out that I was having this whole investigation and dealing with an internal whistleblowing case she actually ran to the board and said do you know what's happening and that's when the board was very upset so apparently Marcus Brown was upset because his time was being wasted over 30 to 15 million euros worth of invoice uh discrepancies so he thought that was a very small amount that was a waste of

his time and then Yan Mar's view was that he wanted to take over the investigation and he was very upset because he said Asia is his setup like he cre he was responsible for that whole region in terms of creating it and having an oversight role um over it because all the Executive Vice Presidents who are basically the heads of each of these different jurisdictions were in APAC wiard was operating it they all reported pretty much to Yanmar the CEO so in that way there was a strange

governance setup as well because all these EVPs did not necessarily get along with one another but they because they reported to the same boss and they were kind of lateral I think they they just toed the line um so yeah he wanted to take over the investigation the other two board members were new so we had a new CFO Alexander vono and Susanna title I mentioned I think they were quite ambivalent because the two main guys on the board were completely against doing

anything so yeah that's from that moment my life kind of took a downhill turn professionally because the general Council and the local CEO person in APAC um they were assigned with kind of making my life difficult and driving me out of the company somehow and what happens if I if I'm I mean I I know the story but I think for for the purposes of our audience it would be interesting to to to talk about it well from being praised um oh on the work that I've been doing since I joined

the company and even the quick promotion that I had um including on the on the investigation it's on you know on that front um they were all good things but suddenly you know my work started getting looked at I was being questioned uh they created a HR case against me which took three months to investigate um I mean that's just standard stuff but it didn't go anywhere so when that didn't go anywhere they tried to send me on a oneway trip to jakata and I received uh couple of phone

calls from Munich saying don't go you won't come back I mean that's a long story so because finally after four months um I they had like a valid reason on paper at least to say that look we're trying to send him to Jakarta on a business trip he refuses to go that's insubordination so using that they finally forced me to resign interesting and so your I mean your case I mean The boying Whistleblower case was also um uh interesting because similar similar

Echoes and I wonder if you have a view of you know from your experience of regulatory Frameworks because it's also it's about the board but it's also about you know what Regulators put on paper allowing whistleblowers to actually play a role and and giving them the attitude to effectively have access to uh the board media Regulators to to actually um voice their concern what are you know after the situation uh what are your thoughts as to the effectiveness let's

say of the German framework but maybe you have thoughts on on other countries Frameworks in terms of actually protecting whistleblowers are there um instruments that exist Beyond let's say the board of directors and the corporate culture uh or was that was that uh a mute point well they Germany didn't have any protections at the time um only recently the EU whistleblowing directive has kicked in and I think wire card was one of the primary instigators of that to get it implemented so since then uh

Germany has also taken the weakest possible approach to that directive and its implementation basically the fines for non-compliance are just 50,000 and in order to get the the ACT actually passed in Germany they had to bring down the proposal from €100,000 to 50,000 EUR and also what Germany has done is they've told all the organizations that are impacted by the directive that you know processing Anonymous complaints or reports is optional so that kind of

makes it a it just neutralizes the entire impact of the directive and it doesn't seem to appear like lessons have been learned in taking whistleblower protection seriously at least in Germany if you talk about Spain the fines go up to1 million euros right so that's the big gap uh that we are seeing in terms of how the EU Nations have at least implemented the directive if you talk about other countries Singapore has no whistleblowing laws that are holistic um and you know they have very obscure references here and there like there's a

tax uh income tax one where if you you know you reveal or you give a tip off about someone doing tax fraud then you might get a cut from that but otherwise there's no holistic protection and that's you know Singapore's a a financial Hub of the APAC region so it's quite shocking to see um London UK has a very weak one it's called the pida um they I think in the process of reforming that because the UK obviously is no longer impacted by the EU but I think they will eventually be forced to align

um in terms of protections I think the US still takes a very strong lead on that front but it's one of those things that even if you use the whistleblowing line just like if you make a police report is that report stuck in a queue somewhere or has it been dumped Somewhere Only You know to be Revisited in a few years uh when something else happens that forces that so there's no control over the process and you know you're just stuck in this no man's land so I think that's where you know potential whistleblowers who really want to take this forward they realize that

the media is the best and quickest option but again like do we want a scenario in the world where because people don't trust what's in the company they don't trust law enforcement and Regulators that they just go to the Press I think that's a very uh depressing setup and not ideal and in fact I think it was it was interesting in the in the wiard case there was you know when when there were press reports and and that caused the the share price to go down baffing kind of you know had a had a hard time and

they actually went I think if I'm not mistaken under after the the the the people who who actually went to the Press instead of looking at the company's uh own wrongdoing if not if I'm not wrong right yeah that was completely shocking because and frankly disgraceful because when when such a big news had come out by the IND DFT instead of what any regulator would expectedly say which is okay we understand certain allegations are being made against one of our listed companies we are going to

investigate until then we have no comment the Baffin actually took the step forward and exonerated the company pretty much by saying this is likely a short seller attack and this is an Asian problem not a German one so that was very unusual and you know subsequently the Baffin also took very protective measures to Pro to you know protect or Shield wire card for example they ban short selling on wire card stock for three months that was unprecedented and they started criminally Prosecuting um the two journalists from

the F so when I saw all of those things I realized that the ft is being neutralized by the Baffin and um that's when I reached out to Suda Z in Germany and I thought let's get the German papers involved and try to change the perception from within Germany so maybe if German papers started reporting they would they would not prosecute them they would actually take it seriously and not see this as like a a jealous UK paper trying to take over I mean trying to bring down like a German success story

so I did you know it's interesting the politics because governance is I mean technical so the field of governance is technical but we know from from also from other cases like for example the and I've I've had discussions about this governance dialogues around you know us trying to delist Chinese listed companies and we had actually it's interesting you mentioned short sellers Carson block who is a very famous story of a of a short seller who blew the whistle on um nmc which was an amirati

company Healthcare company and then also on Ling coffee which is a Chinese company who both um had enormous fraud going on and he also uh spoke on on in in my conversations with him on this program about the challenges he's faced and and it's it's it's interesting how Regulators react to short Sellers and what role do they actually play but the question that your comments kind of bring to mind is is the role of you know the board and the regulator because it seems to me that logically speaking I

mean in in in the governance world in the reporting World bus blowers should have unfed access to the board which in principle should take action in your case that was a failure and then presumably also to the regulators and that was also not exactly didn't pen out as you know one would expect right so that begs the question of what you think could be alternatives to to these two let's say um organs that that should take whistleblower seriously

you know apart from going to the media which as you say is sort of like a the the plan C uh what what are in fact other mechanisms that could work uh in your in your mind I think like Yar was pretty unique because the the B itself was a corrupt one potentially so even if the reporting went to them that's and in fact what wart did after they found out I was investigating the company when I was still there and you know they created this Anonymous whistleblowing Channel which they rolled out to all employees

by email but when I asked um the deputy general counsel like who is this actually going to he said it's going straight to yanmar's SL so what the board was actually doing was utilizing a legitimate tool as a fishing kind of exercise is to find out who else knew incriminating stuff and then potentially they could use that and get rid of them so that was quite scary um if you think about it because like as a l employee you might have completely no idea and just be genuinely and innocently raising

concerns on this tool but without knowing that it's going straight to the very people involved right um in terms of other channels well from a regulatory perspective Singapore was the only regulator that actually acted so the commercial Affairs Department the police they actually raided the company within 3 weeks um of the first ft article coming out so they were the only Regulators that acted right away um the Baffin never acted actually and this is

shocking because I always I had sent them all the info just a few days before the first article came out so they all had the material um but they still refus to look at it and they never did Munich prosecutors never did as well um so that was shocking I think as of today with the directive in place I think the protections from an EU standpoint are quite strong because what it says is you know every employee and vendor has three equal Pathways to whistleblowing they can either use the internal system that

exists or they can go to the media or they can go to The Regulators so I think this is quite uh damning for the companies because if someone's using your internal tool and you're not behaving appropriately they can then use that evidence and go external and show how you didn't or refuse to deal with it so I think that's pretty um that's not good for organizations that don't want to act appropriately and also what the directive has said which brings it in line with the US position is that the burden of proof is now on the company to

show that it didn't retaliate against the person that was raising a complaint so that's quite difficult now for companies to prove that but yet on the flip side it also gives you know potentially malicious employees a reason to Blackmail companies um so that's quite a difficult balance we I think we we have yet to see it play out um since it's still quite new and how companies would deal with it some countries have got an utsman I think the UK is trying to come up with one like a independent

body but what's important about this body I think is that they need to be they need to play Not only a intake role but they also need to play some kind of a counseling role because often times you know whistleblowers just want to know that someone is there that they can confide in and um that can put them on the right track and tell them look your your issue is being heard and whether or not it's legitimate or not they also should you know give them some kind of feedback and not keep them in a limbo

because the more you're in a limbo the more irrational you'll probably get and the more crazy stuff you end up doing um so we need to find a way to from a psychological perspective also manage uh employees in that situation and it's interesting because I think you know it's actually the first time I hear anyone talk about kind of the psychology of whistleblowing because it's also we have to think about these are real people who are afraid for security and the boing case was also very concerning in that regard like what how boying has played out I don't know if you have thoughts on that but you know that that

is a more recent case and that frankly has it's it's quite U makes makes you wonder uh what goes on and and I think only last week the CEO of boing just got uh or the chairman I forget uh reappointed on on in their in their role regardless of all the Scandal but one thing that that that I would like to to one thing that that comes to mind from your comments and you you went through because obviously the company had complex operations around the world and

different Regulators as you mentioned reacted at different speeds and that also the case in in other cases for example the one I mentioned earlier nmc um the The Regulators in the US reacted before emirati Regulators were some of the like the the headquarters were were based and so it's interesting because if you think about if you kind of take a step back and we think about for example anti-money laundering there's strong uh coordination amongst AML entities in prosecution of of crime there's kind of

a you know very strong emphasis on that but if you think about the world of Securities regulation we don't really have this idea that Securities Regulators need to I mean at least formally collaborate in investigating these kind of cases right in a sense that everyone every regulator every nation has the let's say the the the right or the prerogative to move on their own speed and if those speeds line up and eventually these Regulators May exchange information but there's really not a mechanism as far as I know to to

do so yeah I mean I'm not too much into those mechanism details yet because they I know there's increasing efforts in collaborating on a crossb crime basis at least from a Singapore angle for example that's very strong and fast collaboration within the Assan region um Among The Regulators in Ward's case this played out because Singapore was trying to get um a lot of you know cooperation done with the German side Ward's strategy was to say that look our

servers are in Germany and this and that so I think that pretty much delayed a lot of the law enforcement and Regulatory efforts uh I think if this wasn't Germany and Singapore but say Thailand and Singapore or Malaysia and Singapore that would have been way quicker and and the cooperation and collaboration efforts would have been faster um and also the point on why Singapore acted so quickly is because the FTS articles were coming out saying all these wrongdoings are happening in

Singapore so Singapore is pretty hyp sensitive to Foreign Press talking about bad things happening in its Country and that was also the strategy we uh specifically wanted to use knowing that would happen because you know if you just go to the police and stuff you have no control over the process they could just put it uh file it away or potentially you could be exposed in the process as well whereas if you go to like a very reputable paper and they start reporting about bad stuff happening then a country like Singapore will be forced to actually act and do

something about it and I guess that's Al also why you went to the the German newspapers as well right yeah it's just again like the German side didn't they I don't think they have acted in fact they found out um that the employees of the regulator Baffin they were trading wirecut stock until the very last day so yeah that's quite I don't know I mean there's just no comment on that that's positive no and that was also I think the case with other German companies I mean there was I I was flabbergasted

frankly when I when I saw that because obviously it goes without saying that if if you on the board and you have uh blackout periods for trading and whatnot then obviously the same at least the same goes for the regulator if not more and how can you regulate while you're trading because obviously you have access to confidential information so that that that that is a another baffling side to it but but if you just um moving on to kind of a slightly different angle I mean we talked about a lot of this sort of um difficulties and

challenges but kind of if we take a more optimistic role and or look Outlook and going forward um in terms of technology and AI do you see that that uh going forward there are some new tools that are emerging that can help Regulators or help companies um deal with a corporate fraud could these tools be actually useful to whistleblowers or or how do you see that that scene unfolding I think the issue with AI is that like every technological advancement we have

seen The Regulators are very slow in reacting to them so we saw that happening in fintech and then we saw it in crypto where once Tech is moving at such fast speeds uh from a regulatory perspective is very hard to play to keep up with it and AI is specifically concerning on this front because you're talking about deep fakes you're talking about using AI to commit you know AML offenses we saw that in the Hong Kong case where over a zoom call a CFO was

deep faked in instructing money movements and it really happened so you know how from a whistleblowing perspective if a company is already in the habit of forging documents and doing all kinds of stuff and now they start forging documents using you know sophisticated tools like AI Against The Whistleblower knowing that the person is trying to expose them then how does that individual from a resource standpoint prove otherwise right because you're dealing you don't have the resources to take down uh and to go

through those levels of forensic proof to show that you're not involved in this and that you didn't do X Y and Z but the company definitely has those kinds of resources um so that's very concerning from a whistleblowing perspective I think if you think also about wiart wiart had 200 million data sets of transactions that were fake so clearly they had very strong intelligence type um access to to these

kinds of tools we're not talking about like 50 or 100 people sitting in in you know an offshore jurisdiction or developing country somewhere trying to create these transactions you're talking about very very powerful tools that were used and sophisticated ones to create these data sets and then using AI when they actually tried to look at these data sets AI thought they were legitimate so these are that's the level of sophistication and assistance wiard head I would say um in carrying out what

they did so you know how how companies potentially startups in the AI space create anti fraud tools to battle these things I think it's just going to be a cat and mouse game and remains to be seen it's very exciting in that sense I I agree with you but I think also one one thing that comes to mind you know if I go back to the beginning of our conversation is about the internal audit function so when you think about you mentioned just now 200,000 no data sets that are are being

used to create scenarios and 1.5 FTE in the internal audit Department like you kind of see the the huge dichotomy between the the the data that's being generated by companies and could be used to promote fake Etc um I mean could be used for legitimate or or or fraudulent objectives and the reality of you know key corporate key sort of lines of defense and how there's you know with all the corporate governance regulations we have that internal should

have access to the board Etc that that it doesn't prevent huge companies like wire card to have a completely dysfunctioning um line of defense without you know anyone sort of asking questions yeah and there was no excuse for internal audit for example to have not picked these up because when you look at those documents that I came across from the inboxes of the individuals that I was investigating they were very very obvious like you know you had invoices that were uh in

Euros but yet from a Malaysian company so those kinds of things just don't happen you had third- party companies that had absolutely no reason to be invoicing wire cart for payment services basically invoicing wire cart for things that wire cart would be invoicing them for so all these kinds of very obvious easy to detect um items should have been what I would have flagged right but they never did and even if IIA didn't did external Auditors didn't do it so that's where it gets quite crazy because if I

could look at these things and know something bad is happening like it's just irrefutable evidence then why was it that uh you know ey and and internal audit or any of the control functions just didn't do anything about it no it raises a number of questions because as you say and as we are discussing in this conversation it's obvious that while you can regulate so much in governance you can regulate the independence of the board and all of these aspects are are quite strictly regulated in Germany like sort of the

the the cool off periods from the executive board to the to the supervisory board I mean there there are you know a lot of BZ and whistles that go and and regulations that go into uh kind of addressing all the the parts of the equation that we're talking about so it is it is for that reason all the more baffling how this could uh could could have occurred with with the with the you know practically no action by the the the auditor uh the internal the the

internal auditor the external auditor or the regulator and that it came actually from the legal department but that aside just just to kind of maybe to close this conversation just in the interest of time though I have many many many questions for you um I'd like to turn to to what you've done uh with your with your story with your personal story and you know obviously when you left or when the story ended you founded a company called confide uh which has which is provides um whistleblowing technology platform or services to to other

corporates in the with the view to enable uh whistleblowing to actually um uh serve its purpose so I wonder if you can kind of talk us through a little bit through the Journey and what your company does how how you've actually managed to maybe turn the page but also do something that that addressed the very failure of wire card yeah I was always asking myself what what was the bigger purpose in exposing white card like what was the reason like what is my um pathway and it just struck me last

year why not create you know put the experience that I've had as general counsel so I've seen how poorly companies have dealt with or or still deal with internal issues like whether it's me too or it's Financial crime or anything you know the executives just don't want to hear about it or they want to make it go away or hope that it just mysteriously goes away on its own and then they get surprised when they read about it in the media and or regulator sends them a notice and then they start playing reactive right they're like okay what happened now who dropped the ball

and why didn't we deal with this so I've seen that from a general Council side I've seen it from the whistleblowing side so putting all that experience into a product that would benefit companies people and lawmakers and that's how confite came about I think it's a very powerful word because every time you in know a situation where you want to speak up uh or raise a concern you don't know who to confide in or you conf fighting in the wrong person or simply not allowed to like if you've got legal privilege or ndas and other restrictions in there so the idea of confite is to really tell companies hey keep have

something that actually works that's secure and protects the individual from reprisal deal with it as an early detection tool you may you you don't know like something in there could be a potential game over event but it's giving you the opportunity to act sensibly and deal with these things so that employees are not for to go outside the company to the media or to the you know whoever and raise this consents outside and then damage you right so that's the whole concept behind it and

and just um just if you can explain it so if if you think back to the wire card scenario as you mentioned one of the the key issues in in you in your your challenges in being able to to raise your concerns was the board itself so how does does the solution that you are working working on or you have you know developed um kind of address some of the pitfalls that you actually encountered in in your in your previous job I think it's all about the audit Trail and

immutability around it so in this case if confide was in in wire card and I had used confide and I raised those concerns I would see how the case is being dealt with um if at all being dealt with I would have seen involvement from the German side assuming the case manager was from there if it's a very senior staff because the rule for case managers should be definitely not middle management because historically middle management is the one that's um not I mean trying to block things from going upwards so if if it was the General

Council dealing with it if it was the head of the arc committee dealing with it or even if it was a board member um dealing with it I would have seen the correspondence and the flow and then assuming that instead I started getting attacked or the company was not doing anything thing I could then use that information and go outside and that would have created that audit trail that you know the Munich side the German side was actually involved in it because Ward's defense all the way was that this is an Asian problem Germany has no idea

what's going on there's nothing to do with them the board doesn't even know but using this kind of solution you can show exactly that this is how the thing happened this is what they did this was a knowledge and because they didn't act I I then took the information and went outside uh so I think that's where the difference is because otherwise what you tend to H what tends to happen nowadays is you may have like a whistleblowing policy or some kind of whistleblowing tool that's nothing more than a glorified inbox but there's no audit

Trail there so people are just putting in stuff and then whoever is managing it is moving into email into a physical meeting into a different solution there's a lot of he said she said kind of risk um so there's no endtoend audit Trail so that's what we're trying to fix interesting interesting but of course I think as as somebody who works in governance you know it forces me to to to to say that it's still kind of contingent on um the board or the regulator being of course receptive and

open to to that which you know shows how whistleblowing is really kind of a part of a of an ultimate governance pyramid where you know different pieces and functions have to to assume responsibilities otherwise you know we're we're in a in um as you say cut Mouse game right yeah I think the the difference here is that the bards with a solution like on fight the company knows what the risk is of not dealing with things sensibly because they can't go to the IT team and try to delete stuff uh

which happens very much in frauds right they go to shredders last time start shredding documents go to the IT team and start to not only track who's making reports if you're using your own internal system but also po potentially delete sensitive info or incriminating info so I think that's where so the board would probably be aware and this is one of the things that I mean wi card is very unique because a board itself was corrupt right um but and being criminally prosecuted but I think in the vast majority of

companies out there uh a lot of times the executives at the top they just don't get that information and you know this is where we're trying to fix that Gap and give them the opportunity especially directors what I want directors to do is to have access to whistleblowing reports not only be told like okay we had four cases this month and that's it um but also have that access and potentially you know in in smaller companies private shareholders to also have access to that because if

you think about it like even from a nonprofit angle you have all these donors that are giving all these Charities and nonprofits or NOS all this money but there's a lot of abuse happening in those you know those entities so why why are donors not asking these entities or saying as a condition of me giving you x amount I want you to have this solution in place and I want to be able to see you know if anything goes wrong um or at least have that ability if I want to I think that's a very strong check and balance you know

it's funny because I didn't you know in preparation for the for this conversation I didn't think of the the Donner angle which is also an interesting one and in fact brings me to to mind another case which you may have heard about in the Middle East called the brage which was a private Equity company to which B Bill melind Gates Foundation the Kuwaiti Sovereign wealth fund and many others you know donors gave money to invest in emerging markets and there was a huge Saga was also uncovered by journalists uh I think W stre Journal journalist that resulted in

this fascinating book being written called the keyman that talks about the unraveling of aronis empire in in a brage and all the fraud that was that was committed so that that brings us to a whole uh other conversation and we in fact I think it would be great a topic of great interest to to investigate on another episode looking at you know donor funds and what how they're transparently or not they're they're being deployed but I think that would be for for for another dialogue but for today's um conversation I think that was

I'd like to thank you for for all your insights and for sharing your personal story because at the end of the day it is also a personal Journey for you um on wire card and confide and we will obviously include some links uh in in this episode enabling our viewers to to have a look at uh the technology that your company uh that you've developed and I think it's very interesting uh and I would like to thank you for your time and and talking to us about what happened in wire card and such um um Frank terms sure thanks so much for having me thank you and for our viewers

thank you for joining us and please uh feel free to um uh follow governance dialogue subscribe to our Channel and we'll be uh back with with uh other interesting governance stories um in the coming weeks