Whistleblowing

"Our lives begin to end the day we become

silent about things that matter."
-Martin Luther King, Jr.
 What is Whistleblowing?

Whistleblowing is…
'raisingconcerns about misconduct
within an organization or within an
independent structure associated with
it'
 Whistleblowing

Whistle blowing in its most general form

involves calling(public)attention to wrong
doing, typically in order to avert harm.
Whistle blowing is an attempt by a member or
former member of an organization to disclose
wrong doing in or by the organization.
 Kinds of Whistle blowing

 Internal Whistle Blowing

When the disclosure about the improper conduct is made within
organization.
 External Whistle Blowing
When the disclosure about the improper conduct is disclosed publically.
 Personal Whistle Blowing
Here the charge is not against the organization or system but against one
individual.
 Government Whistle Blowing
When the disclosure about misconduct in departments of government.
 Corporate Whistle Blowing
When the disclosure about the improper conduct within a business.
MOTIVES OF WHISTLE BLOWING

To enforce ethical conduct

To protect public interest
To motivate managers morally
To highlight the possible risk
To minimize organization’s exposure to
damage
To encourage employees to bring ethical
and legal violations
 STAGES OF WHISTLE BLOWING

 Stage 1: is there potential whistle blowing scenario

 Stage 2: seriousness test
 Stage 3:reality check
 Stage 4: becoming aware of big picture
 Stage 5:forcing management recognition of the problem
 Stage 6: taking problem to upper management
 Stage 7:going outside the organization
 Stage 8:living with the results
Effects of whistle blowing
 What to think about

The “mom” test:

 “I’m going to be in this industry a long time.
Will this damage my reputation with my boss,
colleagues, future customers or employers?”

The personal responsibility test:

 Weigh personal obligations to family and etc.
that can only be met if you have an income.
 “Will harm avoided by greater than harm
incurred?”
Rarely whistleblower are honored as heroes by their
fellow workers, for the following reasons:

Those did not blow the whistle guilty of immorality.

They doubt the loyalty of the whistle blower

to the employer and perceived as a traitor, as someone
who has damaged the firm - the working family to
which he/she belongs.
Depends on the organization for a job, the job makes
money, the family needs money to survive
 How to Blow the Whistle

Do it anonymously
 let the evidence speak for itself and protect yourself if possible
Do it in a group
 charges have more weight and won’t seem like a personal
vendetta.
Present just the evidence
 leave interpretation of facts to others.
Work through internal channels
 start with your immediate supervisor or follow the standard
reporting procedure
Work through external channels
 go public (biggest risk)
 CRITERIA FOR JUSTIFIABLE
WHISTLEBLOWING:
 According to Richard T De George there are three
conditions that must hold for whistle-blowing to be morally
permissible, and two additional conditions that must hold
for it to be morally obligatory.

 The three conditions that must hold for it to be morally

permissible are:

1. The firm through its product or policy will do serious and

considerable harm to the public, whether in the person of
the user of its product, an innocent bystander, or the
general public.
2. Once an employee identifies a serious threat to the user of
a product or to the general public, he or she should report it
to his or her immediate superior and make his or her moral
concern known. Unless he or she does so, the act of Whistle
blowing is not justifiable.
3. If one's immediate superior does nothing effective about
the concern or complaint, the employee should exhaust the
internal procedures and possibilities within the firm. This
usually will involve taking the matter up the managerial
ladder, and if necessary and possible to the board of
directors.
 The two additional conditions for Whistle
blowing to be morally obligatory
4. Whistleblower must have accessible documented evidence
that would convince a reasonable, impartial observer that
one's view of the situation is correct, and that the
company's product or practice posses a serious and likely
danger to the public or to the user of the product.

5. The employee must have good reason to believe that by

going public the necessary changes will be brought about.
The chance of being successful must be worth the risk one
takes and danger to which one is exposed.
Morally justifiable whistle-blowing are
easier, safer and more efficacious.
Because directors, share holders and other
authorities don't pay much attention to petty
or unproven complaints.
examples
 Sherron watkins

F O R M E R V I C E P R E S I D E N T O F E N R O N
CORPORATION
A L E R T E D T H E N C E O , K E N L A Y I N A U G U S T
2001 ABOUT ACCOUNTING IRREGULARITIES
WITHIN THE COMPANY
W A R N E D T H A T E N R O N M I G H T I M P L O D E
WAVE OF ACCOUNTING SCANDALS
T E S T I F I E D B E F O R E C O N G R E S S I O N A L
COMMITTEES FROM THE HOUSE AND
SENATE INVESTIGATING ENRON’S CASE
L A U D E D I N T H E P R E S S F O R H E R
COURAGEOUS ACTIONS, BUT LEFT HER JOB
AT ENRON AFTER FEW MONTHS
 COLEEN ROWLEY

F B I S T A F F A T T O R N E Y
W R O T E 1 3 P A G E M E M O T O F B I D I R E C T O R
ABOUT PRE- 9/11 INTELLIGENCE IN MAY
2002
T E S T I F I E D F O R T H E S E N A T E J U D I C I A R Y
COMMITTEE
C O N C E R N E D T H E F B I W A S B E C O M I N G
MORE BUREAUCRATIC AND
MICROMANAGED
H E L P E D G O V E R N M E N T F O C U S O N
BETTER INTELLIGENCE MANAGEMENT
 CYNTHIA COOPER

W O R L D C O M ' S D I R E C T O R O F
INTERNAL AUDIT
H E R T E A M D I S C O V E R E D $ 3 B I L L I O N
IN QUESTIONABLE EXPENSES
M E T W I T H 4 E X E C U T I V E S ,
WORLDCOM STOCK FROZEN
CORPORATE CREDIT RATING WENT
WRONG FROM B+ TO CCC-
R E M A I N E D A S V P O F I N T E R N A L
AUDIT NOT PROMOTED, NO
GRATITUDE, RESENTED BY
EMPLOYEES
 Statistics

Polling Group:
 233 individuals polled, 40% responded
 Average age: 47
 Employed for 6.5 years at job
 Almost all lost job
 Statistics

Negative Effects:
 51% of Gov’t employees lost their job
 82% harassed by superiors
 69% watched closely after blowing the whistle
 63% lost job responsibilities
 60% fired
 10% attempted suicide

Positive Effects:
 20% felt their actions resulted in positive changes
 More than 50% (of responders) would do it again
 Ethical Dilemma

 The Mum Effect--reluctance to blow the whistle

 Audit report may contradict the best judgment and vested interests of the
powerful players backing a project; fear of reprisals

 The Deaf Effect--reluctance to hear the whistle

 “I wrote lots of reports. I escalated things as much as I could, but in the
end, they said, ‘We really appreciate your efforts, but thanks, but no
thanks’”

 The Blind Effect--reluctance to see the need to blow the

whistle
 Established audit functions do not operate effectively because they try to
conceal the information from management
 Management’s response to whistle blowing

The management of a firm must create whistle blowing

culture by :
 Formulation of a policy
 Top management’s endorsement
 Communication of top management’s commitment
 Inquiry into allegations
 Evaluation of the whistle blowing systems
 CONCLUSION

 A whistle blowing incident is probably the most difficult

thing you can experience as a professional.
 Not every incident that should result in whistle blowing
does, sometimes the whistle is “swallowed” rather than
blown.
 If you find yourself in a possible whistle blowing incident,
you should exhaust all internal alternatives for addressing
the problem and accumulate all evidences possible. If
blowing whistle is the only alternative, then you should
anticipate a job change and get a good legal representation.