There are times—reporting about the foibles and malfeasance of companies—that we ponder whether there is success to be had by starting a companion publication.

Rather than focus on regulatory compliance and ethics, our fanciful “evil twin” of a magazine would instead dig deep into avoidance strategies. Imagine such headlines as: ”10 GDPR loopholes you need to know”; “How to discredit a whistleblower”; and “How kitchen posters count as compliance training.”

We don’t mean to imply that companies are blind to what “the right thing” is. Boards talk the talk, and CCOs try to walk the walk. Problems incubate, however, when trouble, is instigated by bad apples unlikely to be deterred by quarterly training sessions. All it takes is an employee or two to cut corners, or cheat the system, for their employer to be thrown into the headlines.

The urge to defend themselves can then lead companies to take refuge in legalese, avoiding a straightforward mea culpa, and relying on defensive strategies to dull the attack. Wells Fargo, for example, tried unsuccessfully to flimflam us all into thinking that more than 5,000 employees decided, on their own and without managerial prodding, to open unauthorized customer accounts.

One strategy that can cause more reputational harm than good, involves stretching the limits of non-disclosure and confidentiality agreements.

The lesson here is that compliance broadly, and ethical behavior more specifically, must be fueled by transparency. Admitting a problem is, counter-intuitively, the fastest way to redeem your public image. Hiding behind layers and the creative application of paperwork may only amplify your headache when it is uncovered.

In recent years, the Securities and Exchange Commission has made it a priority to enforce the use of NDAs to chill whistleblowers.

In 2015, the Commission announced that it had filed its “first enforcement action against a company for using improperly restrictive language in confidentiality agreements with the potential to stifle the whistleblowing process.” The action came in a settled administrative proceeding against KBR Inc., a technology and engineering firm.

The problem, as further defined in a regular stream of future enforcement actions, is that companies are using NDAs, traditionally intended to protect intellectual property and trade secrets, as a form of “pretaliation.”

The SEC says it is “actively looking for examples of confidentiality agreements, separation agreements, and employee agreements” that condition post-employment benefits, such as severance pay, on not reporting activities to regulators. Other companies have warned that an NDA breach triggered by whistleblowing may be grounds for termination.

Meanwhile, amidst the “#metoo” movement and a deluge of high-profile allegations of sexual harassment, companies may be tempted to insulate themselves with NDAs.

Congress is already getting involved, spurred to action by recent headlines and allegations of sexual abuse made against personnel involved with USA Gymnastics, USA Swimming, USA Taekwondo, U.S. Speedskating, and USA Cycling.

U.S. Sens. John Thune (R-S.D.) and Bill Nelson (D-Fla.), have spearheaded the Protecting Young Victims from Sexual Abuse and Safe Sport Authorization Act.

The legislation establishes in law an independent entity to investigate reports of abuse and protect victims following horrific child abuse in the U.S. Olympic movement. More important, perhaps, to corporate America is its warning regarding NDAs.

Victim accusations claim that USA Gymnastics, the U.S. Olympic Committee, and Michigan State University attempted to use non-disclosure agreements to silence a victim of abuse.

In one case, a victim said that USAG actively sought to silence her with an NDA that would impose a $100,000 fine if she were to violate a confidentiality by speaking out about the abuse.

The bill doesn’t focus on companies, rather than sports associations, but it isn’t a stretch to think that a variation might go after firms attempting to wiggle their way out of sexual harassment allegations by misapplying NDAs.

The lesson here is that compliance broadly, and ethical behavior more specifically, must be fueled by transparency. Admitting a problem is, counter-intuitively, the fastest way to redeem your public image. Hiding behind layers and the creative application of paperwork may only amplify your headache when it is uncovered.

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