Exploring the Ethics of Whistleblowing

Imagine this scenario: You and a colleague – let’s call him “Ed” – have worked together in the accounting department of a mid-sized corporation for several years and earn roughly the same salary. You’ve noticed that Ed has made several major purchases over the past year or so – a brand-new luxury automobile, an expensive European vacation, a fancy Rolex watch – and you can’t help but wonder how he’s paying for it all.

You decide to take advantage of your access to the organization’s financial records to do a little discreet digging. Sure enough, something seems amiss, and all the signs point back to some questionable handling of multiple transactions related to Ed’s specific job function. To make matters worse, it appears that certain members of the management team are also engaging in the same practices – which explains why Ed has gotten away with it for so long.

Your discovery leaves you torn. On the one hand, you know that what you suspect Ed of doing is wrong, and could possibly cause serious damage to the financial health of your organization. On the other hand, you consider Ed a friend – he’s always been there to help when you have a challenging work problem and you don’t want him to get into trouble. You’re also concerned about others in the organization retaliating against you if you report your findings – the last thing you want is to be viewed as a snitch.

As this scenario points out, the decision whether to become a “whistleblower” is not an easy one. This is probably why, according to some surveys, as much as 50 percent of observed misconduct goes unreported. Many witnesses of wrongdoing ultimately make the determination that they simply have too much to lose by reporting what they know or see. They fear that their work relationships will suffer, or that they might even lose their job. They also believe the organization may attempt to harm their reputation, which could permanently damage their career.

Why Do Some Choose to “Blow the Whistle?”

If whistleblowers face such an uncertain future – after all, there is no guarantee that reporting inappropriate behavior will lead to the outcome they desire – then why do some individuals make the perilous decision to move forward? The primary motivating factors for whistleblowers include:

  • Self-preservation: At the most personal level, individuals may decide to blow the whistle as a means of protecting themselves from further harm. An employee who is being sexually harassed or threatened with violence may determine that making a call to a reporting hotline is the only way to put an end to the abuse, especially if he or she feels uncomfortable approaching a supervisor to discuss the issue.
  • Public safety concerns: An employee who has evidence that the organization sells a product or engages in activities that put public safety at risk may feel compelled to report the matter to prevent injury or illness to others. A famous example is the case of Jeffrey S. Wigand, the former vice-president of research and development at cigarette manufacturer Brown & Williamson. In 1996, Wigand went public with information that his employer was intentionally manipulating tobacco blends to make the company’s cigarette products more addictive.
  • Financial gain: The enactment of several federal statutes in recent years has provided financial incentive for whistleblowers to come forward. However, there is evidence to suggest that money isn’t necessarily as big a motivator as one might think. A 2014 global whistleblowing survey conducted by Freshfields Bruckhaus Deringer indicated that only about 13 percent of managers in U.S. organizations said that the potential for financial rewards would encourage them to report misconduct.
  • This reluctance may stem from the fact that most individuals who seek compensation via lawsuits are unsuccessful. For instance, according to Patrick Burns, a spokesperson for whistleblower advocacy group Taxpayers Against Fraud, only about 20 percent of cases filed under the False Claims Act result in any type of financial reward. Even in cases where whistleblower suits are successful, it may take years for the plaintiff to receive any compensation, and much of the reward is consumed by court costs, taxes and legal fees.

Whistleblowing: It’s the Ethical Thing to Do

While many whistleblowers are motivated by one or a combination of the factors listed above, they are often only part of the reason they choose to move forward. According to UK-based psychologist David Morgan, who works extensively with whistleblowers, these individuals are often seeking the peace of mind that can only be attained through the knowledge that they’re “doing the right thing.” They possess an intrinsic sense of integrity or justice that compels them to see that wrongdoers are held accountable for their actions – even if it leads to severe consequences for themselves.

The Organization’s Impact on the Ethics of Whistleblowing

From an organizational perspective, whistleblowers can be viewed in one of two ways: as disloyal “rats” with an axe to grind or who may be seeking personal or financial gain; or as courageous individuals whose actions will ultimately benefit the organization by helping to discourage future occurrences of unethical behavior.

Organizations that take the latter approach are making a big step toward establishing an ethical culture; they realize that individual ethics are born of a culture of ethics. These organizations have placed a heavy emphasis on developing a sound ethics and compliance infrastructure consisting of a well-crafted code of conduct, an anonymous reporting hotline, timely and impartial investigative procedures, and effective ethics and compliance training. They’ve also instituted strong polices to protect whistleblowers against retaliation.

Revisiting our opening scenario, as long as you are certain that your motivations are sound and you have confidence in your company’s ethics and compliance system, you should feel free to report “Ed’s” misdeeds through the appropriate channels without fear of repercussion. By doing so, you as the whistleblower are helping to create a stronger, more ethical organizational culture for everyone.

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