Power and Accountability: The Costs and Benefits of Speaking Up

[music] Welcome everybody uh to this event uh sponsored by the corporation society initiative Cassie here at Stanford uh graduate school of business. Uh Cassie is a um an initiative uh that's a collaboration between faculty, staff and uh students built on some resources from the GSB and a lot of passion from the those involved including particular our wonderful student leaders uh who do uh work helping us plan events, write the blurbs and uh you know tell their friends about about it uh which helps us get engagement. We were we've been wanting to do an event on whistleblower for forever since we started in 2018 and it's the first time. Please feel free to come in in the front is fine. Um sorry uh since 2018 students have wanted it. I've wanted it. I include uh a discussion of whistleblowing in my uh teaching uh here at GSB. Um and finally we were able to uh get two individuals who can really take us into into the world of speaking up. Um so let me just set it up by saying uh what if you see something or experience something that is you consider unfair, unjust, uh harmful, maybe illegal uh at work or even in your personal life. What are your options? What might you do? What will you do? Uh especially if people with power don't want you to do anything about it. Uh that's the dilemma that uh that we're facing here. uh and that we want to delve into through the experience experiences of our two guests uh who exp encountered this situation and they did do enough to make us aware of their efforts. Um and they are change agents. We had an event here on choosing leadership and leadership is about changing and improving the world. U so that's what we want to uh delve into here. Uh Eric Ben Artsy uh sitting here has a the multiple degrees including a PhD in mathematics from NYU the doctorates from NYU. He works at the risk manager in Goldman Sachs and in Deutsche Bank most recently in terms of big financial institutions and he uh gave a tip to the Securities and Exchange Commission about a very large accounting fraud in uh Deutsche Bank uh around 2011. I mean, the fraud goes before that, but that's when he uh informed them, which led ultimately it led to some news coverage, and it led to a fine of $55 million in 2015. Um, Ellen Pow has engineering degrees from Princeton, a JD, and then an MBA split up with two years of being a corporate uh attorney in between the JD and the PhD. A after which she worked in many different positions in Silicon Valley including in particular the seven years uh that she spent seven and a half years in Kleiner Perkins um whom she sued for gender uh discrimination um for retaliation other uh um claims about her employment there. Uh she became an icon for doing so. It was couple of years a years before the sort of known me too around Weinstein etc that came in 2017. The framework for both of these is sort of the early you know 2010s to 15 both of the cases. So a decade more ago uh they concluded in terms of the legal uh parts of it. uh and Ellen uh proceeded the the trial was a jury trial and um she would not uh settle the case such that she also could write a book about it in 2017 and we have some copies of this book called reset. Uh she has a nonprofit now called project include Eric Bernardi is an entrepreneur and a consultant u uh and that's our panelists for today. So, I want to I I I'm going to ask a few questions and I'm going to turn it to the audience. We have to be kind of out of here about 12:50, so we're going to have to compact this uh this event. Um so, first of all, let's start with the two of you uh give the very different issues. One was gender discrimination culture uh in tech companies. The other is accounting fraud uh in a financial institution. uh but there are multip there are questions I can ask both of them and they will give us their perspective and it it's remarkable how similar uh many of the lessons are even though the stories are so different so uh asking both of you we'll go this way and then we'll go back and forth um how's your experience what was your experience of diagnosing the problem and the process uh of of understanding what's wrong and um most need of change. >> You want to start? >> Sure. Uh so it started sort of very small and very technical as a risk officer. Uh and this was immediately after the financial crisis. So obviously there was um heightened um uh heightened attention to this and I was sort of at ground zero. I was at Goldman when you know when the crisis happened the trading desk. So um I was very very acutely aware um of the issues involved of the sort of the particular creative derivatives that were involved. So it started um as a technical matter um I complained internally. then went to um authorities to the SEC uh to other authorities also in Germany and the UK within uh within the US um and sort of uh followed all the um all the steps that were prescribed by the law by uh DoddFrank and Serbian Zox leak. So there's uh extensive um and very um good protections in the law uh for whistleblowers and for um and for reporting this type of uh for for protecting investors really in the US especially um and I think so when we talk about how do they discover the issues which issues the financial issues that was resolved relatively quickly um but the real issue that I discovered later on and I don't know if Ellen is is uh faced something similar but I discovered that the real problem wasn't uh the wasn't Wall Street, wasn't the financial issues, wasn't the accounting in this case. The real issue was much deeper was really the legal system. And so that became the that became the issue in the in the uh later later years. It didn't actually end in 2015. It ended only years later. But I had a sort of a tour of the US legal system that started uh fortunately for me only the civil legal system and I never never had to do any dealing with the criminal uh criminal justice but within the civil legal system um encountering sort of the conflicts of interest and the um and the um uh misaligned incentives of the various officers of the court um and uh the results. So I think that's that's become for me the the issue that that I'm to this day this and not just to this day also going forward if I could the one issue that I think uh needs to change is is that >> and your experience was more in the private law litigation uh and on topic that is you know known to some people but sometimes at the time that you uh sued not discussed uh can you tell us a little bit about your experience in diagn diagnosis. >> It's similar to Eric where it's like small things that start cropping up and you're wondering how to process them. Mine were more on my performance review. So, I'd have one comment that said, "Oh, you don't speak up enough. You're too quiet." Another one would be, "You're too aggressive. Your elbows are too pointy. You talk too much." And how do you kind of bring it all together? How do you, you know, I'd say like, "Give me specific examples like I want to improve. What am I doing wrong?" and they couldn't come up with any. So, you kind of start adding that up and then you start looking around and it's like, okay, if we have a conference and it's two rows of tables, but all the women are in the back row and all the men are in the front row, you kind of wonder what's going on there. And then there's a ski trip and only men were invited. And it and the reason was um and it's with CEOs and it's with other um folks that are important to um build relationships with and it's because women kill the buzz, right? So you start hearing more and more of this, but the biggest indicator was when um they raised fund 15 and almost all of the men were promoted into the fund as partners and none of the women. So then it's like, well, this isn't just having pointy elbows or being too quiet or not doing the right thing. This is a very systemic problem. And there were other examples that the woman um had experienced uh that kind of showed a much bigger pattern and what um but people wouldn't listen. It was also a systemic issue where this is what was happening in all of venture capital. Nobody had ever um taken these issues public. So there was actually a New York Times reporter I think you the your class read the article a different article but he interviewed somebody who had written a book on Silicon Valley and the that author said um I I haven't heard about it so I'm skeptical and it's just well why would anybody speak up about this because this is a response. So there's and then the legal system like we've talked about it's it's very stacked in favor of the institutions that are VP players and that have all the funds and the plaintiff um firms are struggling and they don't have the resources. We were not able to get live transcripts for the trial like we had to wait until they were cheaper much later and it was just like ongoing disadvantages throughout all these different um areas. Yeah. So looking at it now uh 10 more years later uh the the sort of key events uh what what would you say is your theory of change or the way uh you know most people take a painful experiences or observations like this and don't uh you know process them and don't necessarily you know go as much public or or try to do as much about about it as u as you know you in different ways tried to do so you Ellen had a nonprofit that you started so talk about that or about kind of how you go about addressing the issues I think like my theory of change is that like people talking about it makes a huge difference so it's not necessarily like my one action is going to change a lot of people's minds but it does get people to, you know, not everybody is going to sue, but you know, I'd have people come up to me, one um engineer from a tech company who was a white man said to me, you know, I didn't know about any of this, but then my office mate, my coworker came and told me she had had these terrible experience. She had been harassed. She'd been turned um you know, look uh bypassed for different opportunities and that really impacted him. So the people telling their personal stories, people that you trust, you know, somebody told me about his mom being moved into a broom closet of an office when she was promoted at her university and that story about my, you know, them trying to move me to an office on in another building resonated with him. So these small touch points can make a difference. So people just telling their experiences to other people, not necessarily uh you know they won't necessarily have the same opportunities um and privilege to actually sue and litigate and it's a it's a hard road as you know Eric um but I think that causes a lot of change and then just giving people information. And so project include is focused on if you are actually interested in creating a diverse and inclusive startup here are all of the ways and resources um that you should be thinking about and that you should be considering as you run your company. So just giving people the information and and and hoping that you know understanding that there are good people out there who want to do the right thing and just need a little bit of help. So you're trying to find, you know, good people and persuade them and give them tools to to make a change in their own environment, especially small to medium startups. Eric seems to have a slightly different uh take. >> Um yeah, so I think so, you know, for many years I just was pursuing my own case and then went back to to sort of being a uh fintech and and consulting. This is really the for me I'm a little bit behind Ellen in terms of actually taking initiative on what I uh analyze as the problem. Um but in a sense it's not so much speaking to the better angels of our uh you know of our conscience in terms of how we act uh on a day-to-day basis as much as how we would resolve our uh disputes and conflicts. I think that my diagnosis of the real problem is that when we resolve disputes whether it's employer employee whether it's um counting issues whether it's you know marital issues uh for you know co-founders um we we end up going to the legal system where uh the incentive structure is one that is uh that is misaligned with uh with the interests of both the um um the partnership the people who go there but also the law. So I think so the initiative that I'm embarking on really right now these days is to um is to try and change at a at a sort of individual level you know something that every one of us everyone in this room and uh watching this can do is change how we actually enter into contracts uh with other people uh whether it's written or unwritten in a way that guarantees that when if we if and when we run into a dispute uh we would resolve it fairly. So, we're not committing to being angels. We're not committing to never breaking any uh any promises or or always being a good person necessarily, but if we do, uh we're going to be fair to each other and we're going to resolve it in a way which doesn't uh doesn't use the kind of um >> unfair unfair advantage that uh I think both Ellen and I uh encountered when we when we got into the uh into the legal system. >> Yeah. So, your focus is more on legal system. your focus is more on you know people's goodwill to be inclusive on this specific issue that uh that uh you had uh so from awareness to power do you think that uh for example you know what role do media play or other players uh in in that in particular both of you have had encounters with the media so I want you to reflect on on your encounter with with the media, with the law. Uh, a little bit more detail. >> Um, well, the media is sort of a it's kind of like a tiger. You write it and sometimes it works in your favor and then it might eat you. Um, and in my case, it was, you know, it was very instrumental. Um you know I I formed you know a personal relationship with reporters who really helped bring the case to light and forced the uh regulators uh who were you know very conflicted revolved uh in and out of the bank uh and were personally invested in uh in not doing anything as I like completely incentivized to to bury the case and thanks to the media that didn't happen. Uh but on the other hand in a little you know when I when I approached the media later I really got uh burnt. So I um uh so I I wouldn't necessarily advise, you know, anybody who gets into this kind of situation, you have to realize that the media is also full of um of uh incentives. Sometimes they're the right ones. Sometimes they just want to do something more sensationalist or they need to do they need to get uh you know clickbait, etc. which may not be in your favor. >> Yeah, I totally agree. I think also again you have the imbalance where for my trial there were four PR representatives from Kleiner Perkins in the courtroom every day working the press and I didn't have the resources but also my lawyers were like we're not allowed to talk to the press. We have to keep this um you know this trial and the jury unaffected by our actions. So, they were constantly pushing their narrative and constantly trying to um shoehorn uh reporters into and and kind of bullying them into covering the um trial in a way that was favorable to them. I've had later I heard from different reporters about some of the tactics they used and it was quite um it it was bullying and they but it was interesting because um some of the reporters were women who had had similar experiences and those experiences resonated and they would try to educate the male reporters who were in that room and it kind of over time hearing all the stories and the the experiences that I had had kind of changed the coverage over but it was like a hard process and it was still very unfair because they just had these four people who were paid must have been millions of dollars every day. It was like a fiveweek trial and there were four of them just working the press. So um it is it is hard and then as a reporter you also want to think about long-term coverage. So I'm suing once and you know so they tell my side of the story and I'm favorable to them and I bring them other stories but I don't have that many other stories to tell them. But if you're a big firm like Kleiner Perkins you can give access to your you know portfolio companies you know they work with Google they invested in Amazon they have like a lot of startups that are up and coming that um people want to get access to. Um, there was one reporter who wrote a terrible story about me, um, who one of my friends met with separately. And that reporter said, "Look, I'm thinking the long game. I'm trying to get a in-house corporate job. This reporting gig is not something I want to do forever. So, I'm I'm, you know, so that is how I think about my coverage. Who's the repeat player and where can they take me?" And that's how, you know, that's where my bread is buttered. >> Okay. Okay, I want to go not too long from now to questions because we have a lot of good people. We also have people online. So, welcome to you too. Um, so I want to go to what each one of us can do. Um, everybody in the audience, you might be, you know, we're educating leaders and you'll be in leadership position maybe, but all of us in some parts of our lives are not necessarily in, you know, leadership position, at least not right away. What do you think are the most meaningful actions that people can take uh you know to make change uh with to prevent harms to create more accountability uh and balance power? >> So I think I mean there are some things we can't change. So we can change how you know top lawyers from the administration revolve into you know investment banks into law firms and then you know prosecute or do not prosecute uh or reach sweetheart settlements. I'm sure everybody's aware of the you know stories that keep coming out of of that of that type of uh thing. We can't change that at least not not immediately that that would require massive political change but we as I mentioned earlier I think we can do things uh in our immediate uh um in in our dealings with the immediate with our with with with the people that we we uh get into u into relationships with. uh and so I think I would recommend and this is part of what the initiative that that I intend to take but we start with a pledge of saying that we will always resolve our uh differences fairly and that translates into something very concrete. So if you have a if you're starting up a company u and your founders agreement uh you might have uh you might have a uh something about how you'd resolve uh disputes and maybe you build you bake collab collaborative law for those of you who don't know I encourage you to go look it up later into into that um to make sure that there's not an incentive for any side uh to go and and and treat the other one unfairly when it when when you know when push comes to shove. Same thing goes for your personal relationships and and etc etc. Um, so I think maybe some I'm not sure you know how much success Ellen has with with CEOs, but I would even say that if if you're hiring people and you're now you have more power and maybe you're already in a position where you can affect not just, you know, one or two people around you, but maybe dozens of people under you, then maybe you bake that into the uh into the employment contracts that they're going to be fair and you're not going to um, you know, crush and run over your your employees, etc. So I I think that's that's how we that's the change that I think each of us can can make and it's something that I I certainly intend to pursue sort of as an initiative. >> Yeah. And and I'll take I agree with Erica, but I also want to take it kind of up a level and I think, you know, it's hard. You're in business school, you're thinking about, you know, short-term future, but when you get towards the back end of your career, you start thinking about like what value have I added to the world. What have I want to leave the world a better place with me having been in it than not? And do I want to be the one who um poisoned kids with social media? Do I want to be the one who, you know, took that opportunity and got rid of um revenge porn, which is what we did at Reddit. We, you know, everybody had revenge porn. It was completely um okay on all the platforms. And we decided we're going to get rid of it. And it wasn't super popular, but we got rid of unauthorized nude photos. And that changed every single company and now it's not allowed on almost all the you know major platforms and that followed Reddit taking that stance. So you know how do you think about your opportunities? I sleep well at night except when I'm worrying about my daughter but she's a teenager. So but like for work-wise I'm like I did the best I could. I did the right thing. I thought about all of the different players that I'm responsible for. I thought about my users. I thought about society. I thought about my employees. and I took care of them the best I could. And I wasn't out there doing things that I'm going to regret in 10 years and I'm gonna leave the world saying, "God, I poisoned all these people. I allowed people to steal money from the government. I, you know, like I think Eric, like you can you can say I did the right thing in my career and maybe it's not the most popular thing and maybe it's not the one that generated the most income for me personally, but I'm telling you a lot of those people who are billionaires and very wealthy, they're not happy people. like they don't sleep well. I think they, you know, they're like always trying to get more money or more power and that's a very hard way to live. >> Yeah, I was going to actually pick up with with you a little bit more, Ellen, but anybody can reply on the social media. So I didn't mention in the bio she did um serve as a work two and a half years for Reddit including a stint as an interim CEO and it was Tomulus sleds that it was eventful including the the steps to to take down content which of course is a highly uh contentious area today. Um so as things evolved uh we seem to have uh some setbacks also on the gender issues uh online uh you know AI generated uh sexualized material uh videos uh etc. And you've written opeds and other things about social media. Any observation? I think we're going to look back and like now when I tell people oh revenge porn and unauthorized nude photos it was allowed like a lot of the younger generation are horrified and shocked like what kind of world allowed you to take you know nude photos that you know somebody else took and stole from you and put them all over the internet. Well that was the world we lived in. I think when we look back and we say, "Oh, you were allowed to generate porn of somebody through AI and you're allowed to spread it and share it all over the internet." People are going to be horrified again. I think it's just like we it's just very slow to catch up because you have these people who want to make a ton of money and that greed is driving so many bad decisions and now the government is kind of following it and not regulating the way it should. We're at some point you kind of the world is going to catch up and figure it out. We see different pockets where you know California has some rules um Europe has some better privacy rules but we're going to realize this is causing tremendous harm to especially our children. It's causing harm to our ability to trust in communities. It's causing harm to society in general. And that eventually as an optimist I'm hopeful that that will change at some point. But right now, you look at it and it's, you know, I I try not to let my daughter on social media. I'm not on social media anymore. I was pretty active before because it's it's a lot of it is fake. I'd say half of the posts when I was at Reddit, half of the posts that were very popular were fake posts. And now with AI, I think it's going to be more. So, just trying to understand like what are you actually doing? What are you being pushed to do? What bad patterns are you making? Like now we've got all sorts of regulation around kids having phones, schools are banning them. Like we're slowly catching up, but it's kind of like tobacco where you've got something very toxic. People kind of recognize it and then all of a sudden eventually it gets regulated and that's what's going to happen with social media. So, you should be aware and try to protect yourself in your um and the kids in your in your um in your circles because it's something that we're realizing is is is not good and it's not real and parts of it are good, but you have to really manage it. >> Can I comment? Um yeah so I I don't have that kind of ex my experience with uh social media is very limited but I do see that uh again from my my perspective which has a lot is is very uh focused on both incentives and uh how uh how rules get enforced if I think of Airbnb or some of some of the other platforms as uh that's also a form of social media right connects me it allows me to um you know to to visit my son in college um and and rent an apartment uh from someone uh I know that it's regulated by a company that has the right incentives uh to make sure that I behave well as a as a uh as a visi as a guest and the uh owner uh provides me with a service that I expect. So I I see that as as sort of um u to me that's that's an optimistic uh direction that I think a lot of other direct a lot of other platforms could take in a way that is um maybe less not so much dependent on um goodwill but really really just on on sort of incentive financial incentives. Um and so I think I think we should I would I would hope that we would have more social media that is in which the incentives the financial incentives are um are more aligned with uh with our interests. >> But then it just to say that a lot of the algorithms and other things that make it toxic are very invisible and very hard to you know get get your arms around. So the opacity again is is kind of part of the problem and the incentives then get distorted without anybody being able to change them. >> Right. >> So uh so that's that. Okay. Uh I think we should go for questions uh and more engagement with uh with the audience. Uh go ahead. >> Yeah. Um what would you do differently in the way you spoke up because I'm sure you learned from your experience. What would be a better way to do it? Mix her both of you. >> I think I would have used the media more like really getting my narrative out there ahead of them calling me a poor performer and saying that I was um a bad worker. Like it took so long for the press to come around that if I could have gotten ahead of that a little bit earlier that may have changed the outcome of the trial. So I think that piece I was not um very sophisticated around at that point. Uh I think it depends on how how you kind of which perspective you view it. From for my own sort of uh well-being I should have actually done the opposite use the media less even though the media was very very favor favorable early on it sort of uh complicated things uh in terms of the the entire process. So I should have you know so for my own personal interest it would have been to be uh more quiet and less uh less on the media. That's that's my take >> on that. on that in terms of making change I don't think the media made made much of a difference uh I think I think it took a pretty superficial uh view in my opinion so for instance some of the change that came about I don't know maybe thanks to to this to my activism media wise was that there were some clawbacks from uh top Deutsche executives and generally in regulation wise there were uh you know there's more skin in the game so to speak more clawbacks uh in the financial system but that didn't really fix anything in terms of the incentives of the overall enforcement mechanisms and how we're governed. There's still uh there has been no no change there. Of course, >> Alan, you touched on the uh in inequity in litigation of uh live transcripts. um 95% of what's being invested in AI and legal tech is being invested to make uh corporations stronger, not the victims of corporations strongest. So, um and and I have an initiative called uh justice for all that we can talk about that would try to rebalance that. to your both of your points. The idea that the court system is fair, Eric, is naive. I'm a wild gacha lawyer. It's unfair. So, so what where would you take that? And also, I would think is unfair. So where would you find a third fora that you could know he's fair that would understand that the law was written by lobbyists and would figure it out? How would you do that? >> I I don't have a good answer for that because I I agree with you. The the whole trial was so unfair. They had so many resources. They had do I think they had like 24 people on some of the emails, you know, they had teams of people going through all my email and you know, I sent them everything because I didn't have the resources to limit and they sent me like a small piddling of emails. I had to ask for specific search terms. Um, it it was very hard, but I think that was the best option that I had. there are no other clear options and and I think hopefully you know some of Eric's work takes hold but the system it's very brittle lined up for the repeat player you know the plaintiff lawyers don't have resources they're really investing in the outcome of your case so if they can get you to settle especially in these huge expensive class action suits they will push you in that direction hard even if um maybe your personal interests are are different. >> Yeah. And so first of all, I'm I'm very glad that you're uh that you're taking that initiative. I'd like to speak to you more in depth. I think I'll give you an example of what I think you know maybe more concrete than what I've said before of what you can do. So obviously we can't change the the on our own change the the court system. But um you know one thing that I've done in contracts that I've signed with with partners is is to make sure that is to have a a paragraph that says that if if we enter dispute then yeah we cannot hire separate lawyers but we have to put a make a fund that uh both sides have uh get half for their lawyers. So right away ch change the game theoretic you know the prisoners dilemma where each side it's becomes an arms race. one hires, you know, a worse lawyer, more expensive, and it becomes and the only winners there are are basically the the court insiders. This changes the system because you you cannot you can no longer have gain an advantage by throwing more money at the problem. You can also it's makes it harder to use contingency uh to do that. So, it's it's it's obviously it's a very very limited solution just for you know it's it's not going to solve the whole problem. But I think in in a world where um where this becomes where more people become aware of this issue, uh if you have a big enough network and this goes back to the social network issues, then eventually you can you can create you know maybe something that is um almost you know an insulated bubble sort of a virtual machine on top um of the uh of the legal system which which would be more fair even though you haven't changed the underlying legal system. you shared the language a bit that provision good provision. >> Uh yeah, it was actually approved by court. So I I see it as a sort of an innovation. >> One question I had is I hear often I'm a senior undergrad. Um, I hear often this idea of I want to be like at this at the table where decisions are made and I'm a good person, so I will make better decisions than are currently being made at the same table. Um, and I guess I'm curious, uh, because I often see if someone speaks out about something, then they leave they they they leave the the table, um, and stuff happens and maybe they can hold the people who continue to be at the table accountable to some extent. Um, but have you guys observed interactions at the table where someone proposes something that is ethically very dubious and someone at that table is like, I don't think so. And it gets w backed or does that not really happen? >> Everybody's looking at Ellen. >> Yeah, >> we had one where there was a company that we wanted to invest in and I thought the way we were doing it didn't make sense. So when I joined Kleiner, it was very much about like we're going to change the world. We're going to build these companies that are going to make a difference. And we're looking at one company where we're like this company is like kind of shaky, but they're going to go public and we can just make our money and get out. And I said, hey, that's not what you've been telling me, so I'm kind of curious what's going on here. And we ended up not investing in that company. Um and and so it does happen but it's very rare like then you know and and um it is a hard thing to do and I I think like when you get to that table sometimes you're just hanging on to the seat so it is very hard to speak up and sometimes people aren't even listening to you because you're token so you're there and they don't want you to speak up and they don't want you to turn the conversation another way because you should feel one of the People said you should feel lucky that you're even here. Like how dare you ask for more like you are, you know, you for you to speak up, you know, and they call it complaining. Like you don't know your place, right? You are lucky to be here and you should just shut up. So, it's it's a hard thing to do, but also sometimes like the you know, you have to be careful how you do it, but you can make a difference. And it's um and over time you build that up if you're in the right environment. But it is hard. And I've seen areas like I've read about, you know, the White House under Obama where the women weren't listened to. There's a great article in the New York Times that talked about how they would support each other. So, you know, Valerie Jarrett would hear something that one of the other women would say and she would repeat it or she would or if somebody else took credit for that idea, she would go back and say, "No, that was, you know, that was her idea originally." Or, you know, so there are ways to kind of band together, but it is hard. >> It's I mean, and it's I feel like it's getting harder to your point earlier. It's getting harder. So you have to you have to find a good environment if you can and then or create your own environment and also be thoughtful about you know sometimes you can be in a bad environment but you have a good manager or you're in a good part of that um company where you do have more of a voice and you do have more influence and um yeah but it's hard it is hard. Um, building on what you said, Ellen, when you find yourself in these spaces and talking to people who have directly benefited from unjust systems and unethical systems, how do you have the conversation with those people or what are the kinds of things that you say to help them recognize that these systems are unjust even though they've been beneficiaries of them and in encourage them to change these systems? Right? Because if it's like if I believe that, you know, I live in a meritocracy and I'm here because I'm smart and you come to me and say, "No, the system that created you or the system that got you here is a bad system." That's often a very challenging thing for for people who are beneficiaries to accept. >> So, we we tried to have that conversation at Kleiner where, you know, one woman was liid that the women were all in that back row at that one off site. And you know, I think that, you know, so you know, I I helped her speak up to one of the managing partners and his response was, "Well, you should get all the women together to talk about this." And I was like, "That is preaching to the choir. Like, we are not the problem and that's not going to get us anywhere." Um, and then I sued because I didn't think they were able to hear it. They could not process what was going on to other people within the organization. And I know at the beginning of the lawsuit, they didn't hear it either. I mean, they were so angry like I had stepped out of line. I should be grateful and how dare I um you know, kind of bring up these things that were not problematic. But once the press kind of turned and started writing about how, hey, how can you have a ski trip where it's only men and women kill the buzz? Like that doesn't make sense. And all of these things started to have a different context and they were out of that kind of that that um kind of silo where everybody thought it was okay to do all of these things and that venture capital silo is quite strong. It I think that kind of changed the understanding of what was allowed and what was not allowed. Maybe they didn't agree with it but they knew it was not um something that others were on their side or on. >> Go ahead. >> Hi. Um, as a person who's worked in the media organizations that covered your trial, the internal in the media organizations are similar structures, right? So, you're battling things within there. One question I had for for you because having gone through it over time, made a report, tried to assemble colleagues to back each other up along processes. Is there anybody that you see right now that has built us an internal scaffolding for their organization that actually helps somebody individuals or groups of people sort of address things in real time and with real vigor? >> Right. I I just like I thought like maybe these OMBbuds people would be helpful, but then in talking to somebody who had um was working at an investment bank, I brought in an OMBbuds. They're like, "No, the OMBbuds is paid by the company and it just doesn't work." So I think it's like you just need you need the CEO who's actually going to do the right thing and that per you know that person hires the right HR person and the right lawyer and um and also you need a CEO who's willing to kind of say like I know maybe that's the safest legal thing for me to do but I'm going to make a business call here and do something different. So it's really dependent on the CEO and I I mean I feel like at Reddit I had a good team. We had some kind of not like we had some harassment issues and what we did was we had you know then we did a big rundown of like everybody tells all the thing bad things that have happened to you. We had this culture where it was very loosey goosey and some of the managers were saying inappropriate things and that created a culture where everybody was saying inappropriate things. So we're not going to fire everybody but we are going to do a bunch of training. we're going to tell you what you should do, what you shouldn't do, and you are on notice, right? So, we did end up firing somebody. Well, it was kind of a small team, so um there weren't that many people involved. And then we checked in again six months later, like are these problems solved? like how you know and with the people who were experiencing the issues but it's like I had a very strong team who was willing to do that and an HR person who was trusted who could get the information and and it was something that I felt was important but that like that's not how most companies work and that's not how much it most HR people work. she was out of school and um hired by my predecessor to be innovative and so my HR person was great. She left HR and she's now working in psychology. So it didn't last for her but um but it's hard. The systems don't you know it's a most companies are like they want to protect their legal risk so they do everything and you know the people leave but they get pushed out like they don't leave they get pushed out. I got fired. >> Yeah. I mean, Eric was in very large organization. There you're going to have layers and layers of of people. So, you're encountering not the CEO, you know, the CEO. >> Yeah. It's it's it's uh Yeah. I think my experience with with that with it comes it comes down to the fact that, you know, senior management wants wants things to be that way because obviously they're strongly incentivized. Yeah. And so that's um that's not going to change and uh and the whole structure is is is now is very rigid. >> Thanks uh thanks for coming. Um uh so on a lecture here at GSB in the context about five years ago I was branded by the press as a finance industry whistleblower. Um and I would say about five years on pretty much all the arguments I made the markets fund returns academic papers everything followed exactly what I said. Uh, and I'm an industry exile teaching at Stantum now with a NOG, which is great. Was all the people I was pointing the finger at are still a Davos. Just I mean, I guess my question is when I was growing up, I would have believed that you could go out and say the right thing and everyone would agree and then something happened. We live today at a time when the F team files are in everyone's face. Uh, it's there's bipartisan fingerprints on it and this is the only country where no one has actually been held accountable. Right. Peter Peter Mendlesson was arrested today. Um so the question asks that can we actually tell people like as the world changed to a point where we look now we say power is exercised in itself in extreme ways and you know the incentive to speak up is not really what it was because even if you're proven right power will just squash it. Do you want to start or >> I always have the same answer. So maybe >> I It's a hard question because it's getting like you feel like that that incentive is getting more and more unbalanced now. And I but I feel like I've helped people like I feel like there are people who have come to me and have said like you know I had this horrible experience and I didn't even tell my husband and it's something I felt so much shame about and that I always felt like it was my fault and having you tell your story and now all these other people telling their stories has made a difference. Right? So you you know the system is really hard to change but you can make a difference and before like I'm a researcher I'm like very information driven. So before I sued, I talked to so many people and I talked to a few women who had sued their investment banks and some of them won and some of them didn't. And their advice was like, you know, they say, we tell everyone, don't do it. Like, don't do it. The experience is terrible. You're going to get fired. They're going to go through all your personal background. They're going to, you know, one woman had helicopters flying over her house a lot of the time. And you know, you're going to have you're going to be tailed. you're going to have um all your relationships um kind of poured over. And when I asked her, "But do you regret it?" She said, "No, none of them regretted it." Like, so there was something that they got out of it, even if it wasn't the public recognition or the monetary benefit or the kind of, you know, it was a career setback. You know, for me, it's like I sleep at night, right? Like I would always wonder, well, what if I'd done something? You know, you hear all these other stories about what's happening to people and I hear a lot of them because people want to come to me for advice and it's terrible. Like the stuff that's happening out there is terrible. And if I feel like, oh, I allowed it because I just kept my mouth shut like everybody else in the system, you know, I would not feel good about that. So, I feel like, okay, I've done my I've tried to make a difference and maybe it didn't work now, but now I've got like a room full of people at Stanford Business School listening and hopefully like that will make a little change in somebody and maybe that will that seed will make a change in somebody else and those two seeds together can kind of cause some kind of now I'm mixing metaphors but like a ripple effect. I feel it's very I believe very strongly in the ripple effect like you plant an idea and it grows and you hope that you can right now the ideas are like very much on one side but if you can keep trying to move the Overton window and give people an understanding of like you know it's it's unbalanced but you know your values are not necessarily part of that right you have to decide what's right for you and what kind of change you want to leave in the world and hopefully enough people do that eventually and just hold on to like I know this is wrong maybe I'm not going to speak up about it but at least I know it's wrong right >> want to comment to you you have different qu answers I've over the years in terms of >> yeah things are going to change only when there's I mean at the level of you know enforcement uh of the law is only going to change when the incentives for the people enforcing the law are going to change and that's only going to happen when enough people and this by the way is not unique to the US it's I think pretty maybe with the exception of couple of countries it's everywhere. um the uh enforcement of the law is is not really separated from um uh from powerful people and so you have I mean there's academic papers going forever back I think Galanter in 1970s about how the advantage of the repeat players are usually either the bad actors um or the the powerful law firms both of which benefit from uh breaking the law and so it becomes a situation where um it really pays to break the law and if you don't, you're not going to get ahead. You're not going to move up. And so, you know, that Epstein effect, the reason why you have so many so many bad actors moving up is because they promote each other and it pays. And if you don't do that, you don't get there. And the only way to change that is if there's demand uh to change the incentive system within the legal system. Um I don't think there's enough um there's hardly any um uh awareness of that. It's surprising to me. Awesome. >> Then it's back to awareness and what we discuss. Well, we hope we raised aware. Do we have time for one more question here? >> Okay, one more question. >> I'm Joe. I'm a grad student here. Thanks so much for this presentation. I was curious if you could talk about the effects that ongoing media fragmentation and political polarization will have on whistleblowing. on the media fragmentation. I think we all recognize that's easier than ever for somebody to take to uh Twitter or Tik Tok or whatever it may be and express their point of view, but also it doesn't carry the same authority um that it necessarily did before if you went through um a vetted established and just one of a few media outlets. And then overlapping with that is I think the topic of political polarization because I think whether it's fair or not, the perception is often times that whistleblowers are these progressive activists that are inside these more conservative organizations. Um, and with media ecosystems increasingly being along political lines too, I think it's really easy for a particular complaint to basically be written off by an entire political side and just have sort of rally around the flag phenomenon. So could you comment on how you see both of those impacting whistleblowers? >> Uh, yeah. No, I think that's I mean basically it's not just whistleblowers, it's finding out what the truth is. On the one hand, yeah, there's freedom to a lot a lot of facts come out, but then also a lot of lies come out, a lot of garbage, and then it becomes not a full-time job. It becomes an impossible job to to actually realize to what's what's real and what what isn't. So, I think for whistleblowers, for me, the the the only reason uh things that I was vindicated, that there was eventually a fine, there was an award given in my case. and one of the few uh whistleblowers who were supposedly um successful um was because of because there was uh sort of the gold stamp of the Financial Times initially for my story. Now once that gold stamp disappears and you know there's just a bunch of of of uh social media >> uh media that's out there and the polarization of course makes it harder like in my case my my political leanings are not at all uh are more complex than than just you know progressive and I believe in free markets for example it's not it wasn't as somebody who opposes uh uh markets who did that it's quite the opposite actually I think uh so so I think that the but but still I I can see how uh the political landscape is such that everybody's now, you know, if one one person that you trust or followers on your side team goes against that, then everybody else does and believes that it's a lie. So, yeah, I think it's going to be a lot harder. >> I think the other part that's making it much harder is the harassment that you get from social media and in real life based on the information that's kind of floating out there and the negative narratives against you. Um, and that makes it much harder for people to speak up, much people are much less uh likely to speak up. And I think once you speak up, maybe you shut up because your family is at risk, your um you know, your your safety is at risk and it becomes much harder. So it's it it's it's a hard time. You know, at some point they're going to they need to regulate harassment. Um but it's not happening and it makes it much harder. I think um yeah, I I think it's it's it's becoming now though like the the right is getting harassed too. So I'm hopeful that at some point it's enough that they really try to take hold of this. There's enough cruelty that we decide maybe not to be cruel. That's the hope uh we can send from here. Thank you so much all for coming uh and engaging and spoken. [music]

Eric Ben-Artzi and Ellen Pao discuss what it means to challenge powerful institutions from the inside, reflecting on the personal, professional, and legal consequences of speaking up. Moderated by Stanford GSB’s Anat Admati, the conversation explores how incentives, power, and culture shape accountability when insiders expose wrongdoing.