There is no doubt that whistleblowers need more protection than they receive in almost all instances. However, the new rules passed yesterday by the SEC as reported in The Washington Post today, May 26, 2011 ( run counter to core principles of courageous followership.

Per the Post, “a majority of SEC commissioners rejected pleas by business groups that before going to the SEC, whistleblowers should be required to notify the companies they are accusing of wrongdoing and give them a chance to address the allegations.”

All systems, and their reward structures, encourage leaders towards certain types of behaviors. All leaders at times have blind spots, which include when they are engaging too much in behaviors that hold the promise of short term rewards within that system despite ethical considerations and the potential of long term adverse consequences.

It is central to courageous followership to help leaders see into their personal blind spots, or the organization’s blind-spots, and re-evaluate plans and actions. A process that rewards followers for not giving an organization’s leadership a chance to remedy blindness to wrongdoing threatens the fabric of trust needed in all high performance teams.

Perhaps in recognition of this, the Post reports that “… the biggest consolation for corporations is that, when determining the size of a reward, the SEC could give whistleblowers credit for taking their allegations to the firms’ internal compliance programs.” That is a step in the right direction.

The SEC could take this step further by requiring good faith efforts through the chain of command (skipping levels as needed) or the internal compliance program, to remedy the perceived transgressions, prior to taking them to the SEC or, in very sensitive situations, in tandem with notifying the SEC. If after this good faith effort the corporation is found to have taken retribution against the employee (which organizations are all too prone to do) the size of the eventual reward to the whistleblower should be further increased.

Why put the would-be whistleblower through these extra steps and expose them to potential retribution? Because healthy, dynamic leader-follower relationships that create healthy organizations are based on trust. Creating an atmosphere in which followers are rewarded for circumventing their leaders without giving those leaders a chance to do the right thing will undermine that trust.

If the courageous follower does exhaust the means within the organization to bring attention to wrongdoing and have it corrected, the best thing the SEC could do for the whistleblower is to provide real-time income security, legal and psychological support. Whistleblowers historically pay a frightful price. Let’s design a system that produces more self-correction, less need for external whistleblowing and more support for the whistleblower when going outside the organization does become necessary.