Why WikiLeaks Will Lead to Better Corporate Behavior

"In the struggle between open and honest companies and dishonest and closed companies, we're creating a tremendous reputational tax on the unethical companies."

--Julian Assange, WikiLeaks founder, in a recent Forbes interview

Thomas Coex | AFP | Getty Images

Say what you will about Assange and his WikiLeaks project, there's no doubt that he's changing the game for governments and companies around the world, shining light into corners that many would prefer to remain in darkness. And his approach brings a new threat for anyone in a position of authority—that of enforced, involuntary transparency.

In the Forbes interviewexcerpted above, Assange suggests that he has the goods necessary to take down a major U.S. financial institution, data that "will give a true and representative insight into how banks behave at the executive level." And just in case you're in any doubt as to whether banks are likely to be happy with that, consider Assange's opinion of the data's nearest predecessor: "For this, there’s only one similar example. It’s like the Enron emails."

Uh oh.

In the short term, the ramifications of such an announcement could be catastrophic—both for the bank involved and, potentially, the still-fragile wider economy.

Over the longer term, however, it's difficult to see the threat of such revelations doing anything but forcing companies to clean up their act.

In a world in which news travels as fast as someone can re-tweet it, even the most carefully tended corporate reputation can be destroyed in a matter of hours. And, as the WikiLeaks project shows, no organization—not even the most powerful government in the world—is safe. And the most striking aspect of all is that it doesn't necessitate regulation or governmental oversight: the policing is done internally, while companies are instantly punished by loss of revenue and reputation, even if authorities choose not to get involved.

That leaves companies with little option but to pursue ethical practices—something that Assange underlines in the interview with an anecdote about producers of powdered milk in China. To increase their profit margin—and gain an advantage on the competition—one company started faking protein levels by cutting the powder with melamine. That left legitimate competitors with two choices: follow the unethical company's lead, or continue behaving ethically and risk going out of business or being acquired by the unethical firm.

Assange insists that WikiLeaks offers a third option: taking the unethical players out of the equation, allowing the ethical companies to prosper. In making that assertion, he notes that the process is painful for some, but necessary for achieving the greater good:

"No one wants to have their own things leaked. It pains us when we have internal leaks. But across any given industry, it is both good for the whole industry to have those leaks and it’s especially good for the good players."

Of course, almost every company has information that they don’t want leaked to a wider audience—be it trade secrets, a new invention or prototype, or even word of the latest round of layoffs. But Assange insists that companies can prevent all leaks by following a simple dictum: keep your employees happy. Or as he puts it:

"You end up with a situation where honest companies producing quality products are more competitive than dishonest companies producing bad products. And companies that treat their employees well do better than those that treat them badly."

Phil Stott is a staff writer at Vault.com in New York. Originally from Scotland, he has also lived and worked in Japan, South Korea and Eastern Europe. He holds an MA in English Literature and Modern History, and a Masters in Research in Civil Engineering, both from the University of Dundee.

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