Cynthia Cooper Weighs in on Corporate Culture and Ethical Decision-Making

Cynthia Cooper Weighs in on Corporate Culture and Ethical Decision-Making

Join Richard Chambers for a new episode of his Agents of Change video series, featuring conversations with internal audit leaders from some of the world’s most prominent organizations about innovation in the profession.

In the second of two episodes, Richard sits down with Cynthia Cooper — CEO of Cooper Group, LLC and one of Time Magazine’s persons of the year for her role in unraveling and reporting what would become the largest corporate fraud in history at WorldCom. In this episode, Richard and Cynthia discuss fraud, corporate culture, and ethical decision-making, including:

  • Cynthia’s work with Theranos whistleblower Erika Cheung to support and empower people who blow the whistle on unethical practices. 
  • At both WorldCom and Theranos, “success at any cost” corporate culture opened the door for wrongdoing.
  • Demystifying culture to advance ethical decision-making — how asking the right questions can empower people to raise their hands. 

Watch the full conversation and read the can’t-miss highlights below.

Cynthia Cooper and Richard Chambers share their perspectives on root causes of fraud, how to surface issues in corporate culture, and ways to promote ethical decision-making.

Teaming Up With Theranos Whistleblower Erika Cheung 

Richard Chambers: Cynthia, since WorldCom, you’ve been a strong and vocal advocate for ethical decision-making, and the importance of integrity and courage in the corporate sector. You most recently have teamed up with Erika Cheung, the whistleblower from Theranos. Can you talk a little bit about the work you’re doing together?

Cynthia Cooper: Erika and I were introduced through the Association of Certified Fraud Examiners. We’ve done a number of presentations together, and we’re now doing some consulting work and also doing whistleblower support work. If you’re a whistleblower, you’re often approached by other people who have either been a whistleblower or they’re considering becoming a whistleblower.


When I went through my experience, I had to try to navigate through that alone — there was no book or guidance for me. Erika and I want to be able to share our experiences with other whistleblowers or potential whistleblowers, and also provide them with resources, help them to set expectations, and connect them with people who might help them through the process.

Richard Chambers: I think that’s very selfless. Certainly, there have been plenty of cases of internal auditors who somehow crossed somebody or said something about somebody’s pet project, and find themselves being fired or being retaliated against. I’ve always felt the need to go out there and defend them — but I know that for every one that I know about, there’s probably a hundred I don’t know about. For me, what you guys are doing, it’s a great public service and I, for one, am very grateful that you’re doing it.

Cynthia Cooper: Well, Erika has shared with me how much it meant for us to be able to connect, because I’m 20 years down the road and she was just out of college when she blew the whistle at Theranos. I felt the same way when I met Sherron Watkins and Coleen Rowely, who were a bit ahead of me. You feel as if you’re alone on this island, but when you meet other people who have gone through the same experiences, you realize there’s this whistleblower phenomenon — if you step into that whistleblower box, you’re going to begin to experience a lot of the same things. 


You’ve probably read about what whistleblowers experience: not only retaliation, but they often have difficulty finding employment. They often suffer from depression. Studies show that their marriages more frequently end in divorce, or they end up filing bankruptcy. Real difficulties for people who step over that invisible line that sometimes you don’t even know exists, and speak truth to power. It’s very hard to ever be considered part of the team again — most people who become whistleblowers end up leaving their organizations within a year, and going in a new or different direction.

Richard Chambers: You know, in government a lot of people refer to the auditors as the watchdogs, and as I’ve often said, everybody loves a watchdog until it barks, because it’s at that point that they somehow say, “Hmm, this might not be good for me.” I think you and Erika are out there helping people find their voice, and more importantly, find themselves after those things happen.

Cynthia Cooper: Yeah. I love what you just said about finding your voice. I think that’s important, not only for whistleblowers, but for all of us — and particularly people in internal audit. To find our voice — as I believe you wrote — “even if your voice is shaking inside.” 

At Both WorldCom and Theranos, “Success at Any Cost” Corporate Culture Opens the Door for Wrongdoing

Richard Chambers: The WorldCom and Theranos scandals have gotten a lot of attention, and for good reason, but on the surface those two scandals don’t have a lot in common. What would you say are the similarities between them?

Cynthia Cooper: Yes, you’re right. There are some differences, of course. Theranos was an entrepreneurial startup company in Silicon Valley, WorldCom started out as an entrepreneurial company and grew very rapidly through acquiring other entrepreneurial companies to $38 billion and over a hundred thousand employees. They were at very different places on the growth curve.


But there were also similarities between Theranos and WorldCom. At both companies, there was a gap. In the case of WorldCom, a gap between reality and expectations, and in the case of Theranos, a gap between the promises she made — her vision — and expectations. Instead of telling the public the truth, the executives weren’t willing to accept failure in both of those cases.

Richard Chambers: Success at any cost, basically.

Cynthia Cooper: Success at any cost, exactly. I think at least as much as greed, in some of these cases, pride comes into play. People just don’t want the company to fail on their watch.

Demystifying Culture to Advance Ethical Decision-Making

Richard Chambers: Cynthia, we’ve talked a lot about companies and ethical decision-making, and a lot of it comes back to culture. How would you describe corporate culture? And what advice would you offer CAEs, when it comes to assessing or auditing the culture in their organizations?

Cynthia Cooper: I’ve heard culture described in a number of different ways, and to a lot of people I think it’s a mystery. What is culture and how do you assess or audit culture? I think we need to take the mystery out of it. 

I would really say that culture is like peeling an onion. There are so many different elements and aspects of a culture, from vision, to values, to tone at the top, even the physical location and what that’s like — you have to first identify all of these different elements of a culture. But I’d love to hear your perspective. How do you see culture? How would you define culture within an organization?

Richard Chambers: You know, I’ve been dealing with this issue of culture now for eight years. There are all kinds of academic definitions of culture, but I like a simple one: “It’s how we do things around here.” A great example is Enron. Enron had the most amazing values posters and all, but it’s what you do and not what you say.

Cynthia Cooper: I love the definition. When the organization professes certain values but they’re not living by those values, they’re not in alignment. It’s the same with us as individuals.

Richard Chambers: That’s right. When it comes to advice for auditors and CAEs, about how you audit culture, first of all if you’ve never assessed culture, you’re probably going to find yourself underwater pretty quickly. I believe the best way is to start out by looking at culture in every audit you do, because when we have findings, we’re looking for root causes. All too often, the root cause lies in culture. It’s not that somebody didn’t follow a regulation or a policy, it’s because they were incentivized not to follow the policy. They were in incentivized with the ends, not the means.

Cynthia Cooper: I also think that doing an overall assessment annually can provide tremendous benefits. I’ve studied many, many frauds, how they occurred, and what can we do to prevent frauds and detect them more quickly. If we were to touch everyone in the organization annually — through a combination of one-on-one interviews, roundtable discussions, culture questionnaires — and we asked the right questions, I think some of these issues would fall out early and we could detect them much sooner.


I think there are people who would raise their hands and say, “Well, I’m in the sales division, I’ve been asked to do something and I’m not comfortable with it.” I would love to know, Richard, what are you seeing out there? What percent of audit departments are assessing, either the whole culture or portions of the culture?

Richard Chambers: Well, the last surveys I’ve seen indicated that very few do company-wide audits of culture. But, increasingly I think culture raises its head as something that they get into when they’re doing individual audits, particularly if they find a repetitive sort of condition. They have to figure out the root cause. All too often in the ones that I would call toxic cultures, one of the most common characteristics is that they are cultures where the ends justify the means. It’s that, “We have to achieve this performance level,” or, “These are your performance metrics,” and nobody really looks hard at how did you get there? That repeats itself over and over in some of these cases.