Friday, May 11, 2012

Sir Andrew Likierman: Why We Need to Embrace Whistleblowing

Transcript: Anybody who blows the whistle immediately raises a question: is it the individual? Is it the organization? And, in my view, any organization which has a whistleblower ought to start from the supposition that they are right and there is an issue to address until proved to the contrary. And when I say proved, I do mean proved.

If I had to hazard an opinion, in most cases, there is an element of truth about any whistle-blowing allegation. It may not be absolutely true, but it may indicate something that is a problem -- perhaps not exactly the problem indicated, and that in itself, paradoxically, is valuable to an organization. I mean, what we know from history is that in quite a lot of cases people blew the whistle, nobody paid any attention, it would have been a lot better if the whistleblower had been listened to. That doesn't mean to say all whistleblowers are right, but this is a serious issue.Actually, scandals coming to the open may be a very healthy sign because, in my experience 20, 30 years ago, a lot happened that was never reported, never discussed, and it certainly wasn't ethical. These kinds of practices today are much more likely to come out in the open. So in that respect, therefore, I'm rather an optimist in terms of the general trend.Will there always be ethical issues? I think there will. The borderline in terms of what is ethical and not ethical shifts all the time, and we're not all the same as people. We are very different across countries, across cities, across continents, and it's unreasonable to believe that everybody will behave in the same way. I believe that actually there are more checks and balances now in terms of ethical behavior than there were before. If you go back 30, 40, 50 years ago, the environment was one in which people kept very quiet about most things. You didn't discuss them. Things were carved up quietly behind the scenes in a way that today would be regarded as completely unacceptable, and quite rightly.So in that respect, therefore, is there an ultimate answer, you know, will we all behave ethically? No. The question is: are the mechanisms there to bring them into the open and to cope with them? And not to eliminate them -- because we'll never do that -- but to minimize their harmful effects.


Sir Andrew Likierman, Dean of the London Business School says that whistleblowers need to be taken seriously. While not all whistleblowers are always right, there is usually some element of truth to their complaint.

Directed / Produced byElizabeth Rodd and Jonathan Fowler

5 comments:

  1. Hi Angelo I am responding to the article as part of an assignment so it is fairly long hence I will post it in two or more parts.
    The article recommends that whistleblowing should be encouraged because there is some truth in any case reported. It makes the assumption that whistleblowing and the rewarding of whistleblowers has come to the fore over the last 30 to 50 years. The article also asks if there are mechanisms for bringing unethical behaviour into the open in a way that will minimize harmful effects.

    It is my contention that external whistleblowing and the rewarding of whistleblowers has been around for centuries but has not minimised harm to society. I will also argue that a significant amount of whistleblowing is devoid of truth and actually causes more harm than good to society and the whistleblower. Finally I will show that implementing an internal whistleblowing policy is the best method for dealing with unethical behaviour and minimising harm to the whistle blower and society.

    In relation to business whistle-blowing is the disclosure by a person, usually an employee or former employee of a private business or government agency of mismanagement, corruption, illegality, or some other misconduct to the public or to those in authority with the power to take corrective action.
    Whistleblowing is justified when the whistleblower believes that his work for or association with that organization will contribute to the misconduct if he does not reveal what he knows and he has good reason to believe that revealing the threat will prevent the harm at reasonable cost. (Davis, 1966)

    Based on this Justification If the whistleblower reveals information that is not related to his work for or association with the organisation he could be deemed to be spying.

    50 years ago and beyond media technology did not have the immediate global reach it has today hence the perception that whistleblowing was almost nonexistent. Whistleblowing and the rewarding of whistleblowers is centuries old as is evidenced by the establishment of two laws dating
    back to the 1700’s.
    In 1710 when black slaves, involuntary plantation workers exhibited unrest the American state of Virginia enacted Meritorious Manumission which rewarded slaves with freedom for informing on other slaves. (whgbetc.com, 14/05/2012) It is fair to say that not all the whistle-blowing associated with the Meritorious Manumission law had an element of truth because some whistle-blowing slaves felt obligated to report what was then unlawful behaviour and others were tempted by the reward of freedom to make true or false claims. The rewarding of whistle-blowing in this case contributed in quelling slave rebellion and perpetuating what we now know was a grave injustice that resulted in significant harm to society the effects of which are still being experienced today.
    “In 1863 The False Claims Act was established in America to offer incentives to individuals who reported companies or individuals defrauding the government. It was introduced by Abraham Lincoln in 1863 to target sales of fake gunpowder to the Union during the Civil War. In 1986, the False Claims Act was brought back and Congress added anti-retaliation protections. The Act also specifies that the whistleblower can share in up to 30% of the proceeds of the lawsuit.” (Aker) During the civil war life was extremely hard and many suffering people made false claims for the reward money at the cost of the reputation of law abiding businesses. The penalties for these
    businesses and those that depended on them were often very harsh. There is no doubt
    whistleblowers need protection but offering financial rewards for external whistle-blowing is wrong because it encourages spying and reporting of false claims.

    ReplyDelete
  2. Continued---
    The establishment of The Meritorious Manumission and the False Claims Act is ample proof that mostly legislators pass legislation to protect the power of the dominant group or incumbent administration. The influence of these laws was confined to the locations accessible to the media technology of that time. With today’s advanced mass media communication technologies the repercussion would be global and instantaneous. Externally released false claim information would be instantly available globally causing significant harm through loss of business for the organization, loss of jobs for employees, financial loss for investors and possible retaliation against the whistleblower. It is therefore in the interest of the organisation to implement internal whistle-blowing policies to ensure corrective actions are based on ethical solutions.
    It is not true that any whistle blowing has an element of truth. In its key findings the 2010 Corporate Governance and Compliance Hotline Benchmarking Report states that “For those reports where case outcome was provided, 73% of reports in 2009 warranted an investigation with 40% of those investigations resulting in a corrective action taken.” (The Network, 2010)The report published by hotline operator THE NETWORK, provides an analysis of reports from 4,060 organizations covering the period from 2005 to 2009. From these statistics it is evident that upward of 800 whistleblowing reports were false claims or lacked evidence. The false claims could have caused harm to many organizations if the whistleblowing was external. The harm to innocent employees and investors hence to society would be extensive.
    Internal whistleblowing supported by good policies will minimise harm to society caused by misconduct and benefit organisations concerned about their reputation, success and sustainability. According to the Association of Certified Fraud Examiners 2010 report anonymous tips account for 47% of the detection of all fraudulent activity. (Association of Certified Fraud Examiners, 2010 ) For this reason to protect their reputation and to remain competitive all organizations should consider implementing an internal whistleblower policy. A good whistleblower policy will outline the reporting process to employees, protect whistleblowers, ensure reports are based on reasonable belief that an issue exists, ensure confidentiality and provide feedback on investigation outcomes.
    Aker, T. V. Whistleblowing and Good Governance Policies for Universities, Government Entities, and Nonprofit Organizations . http://www.nysscpa.org/cpajournal/2007/607/essentials/p58.htm.
    Association of Certified Fraud Examiners. (2010 ). 2010 Report to the Nations on Occupational Fraud and Abuse. http://www.acfe.com/rttn-international.aspx.
    Davis, M. (1966). Some paradoxes of whistleblowing Business & Professional Ethics Journal15(1), 3-19.
    The Network. (2010). 2010 Corporate Governance and Compliance Hotline Benchmarking Report. Deloittes.
    whgbetc.com. (14/05/2012). timeline-laws-policies. http://whgbetc.com/timeline-laws-policies.pdf.

    ReplyDelete
  3. Submitted by Richard Frankis:
    The article recommends that whistleblowing should be encouraged because there is some truth in any case reported. It makes the assumption that whistleblowing and the rewarding of whistleblowers has come to the fore over the last 30 to 50 years. The article also asks if there are mechanisms for bringing unethical behaviour into the open in a way that will minimize harmful effects.

    It is my contention that external whistleblowing and the rewarding of whistleblowers has been around for centuries but has not minimised harm to society. I will also argue that a significant amount of whistleblowing is devoid of truth and actually causes more harm than good to society and the whistleblower. Finally I will show that implementing an internal whistleblowing policy is the best method for dealing with unethical behaviour and minimising harm to the whistle blower and society.

    In relation to business whistle-blowing is the disclosure by a person, usually an employee or former employee of a private business or government agency of mismanagement, corruption, illegality, or some other misconduct to the public or to those in authority with the power to take corrective action.
    Whistleblowing is justified when the whistleblower believes that his work for or association with that organization will contribute to the misconduct if he does not reveal what he knows and he has good reason to believe that revealing the threat will prevent the harm at reasonable cost. (Davis, 1966)

    Based on this Justification If the whistleblower reveals information that is not related to his work for or association with the organisation he could be deemed to be spying.

    50 years ago and beyond media technology did not have the immediate global reach it has today hence the perception that whistleblowing was almost nonexistent. Whistleblowing and the rewarding of whistleblowers is centuries old as is evidenced by the establishment of two laws dating
    back to the 1700’s.

    ReplyDelete
  4. by Richard Frankis: Continued: In 1710 when black slaves, involuntary plantation workers exhibited unrest the American state of Virginia enacted Meritorious Manumission which rewarded slaves with freedom for informing on other slaves. (whgbetc.com, 14/05/2012) It is fair to say that not all the whistle-blowing associated with the Meritorious Manumission law had an element of truth because some whistle-blowing slaves felt obligated to report what was then unlawful behaviour and others were tempted by the reward of freedom to make true or false claims. The rewarding of whistle-blowing in this case contributed in quelling slave rebellion and perpetuating what we now know was a grave injustice that resulted in significant harm to society the effects of which are still being experienced today.

    “In 1863 The False Claims Act was established in America to offer incentives to individuals who reported companies or individuals defrauding the government. It was introduced by Abraham Lincoln in 1863 to target sales of fake gunpowder to the Union during the Civil War. In 1986, the False Claims Act was brought back and Congress added anti-retaliation protections. The Act also specifies that the whistleblower can share in up to 30% of the proceeds of the lawsuit.” (Aker) During the civil war life was extremely hard and many suffering people made false claims for the reward money at the cost of the reputation of law abiding businesses. The penalties for these
    businesses and those that depended on them were often very harsh. There is no doubt
    whistleblowers need protection but offering financial rewards for external whistle-blowing is wrong because it encourages spying and reporting of false claims.

    The establishment of The Meritorious Manumission and the False Claims Act is ample proof that mostly legislators pass legislation to protect the power of the dominant group or incumbent administration. The influence of these laws was confined to the locations accessible to the media technology of that time. With today’s advanced mass media communication technologies the repercussion would be global and instantaneous. Externally released false claim information would be instantly available globally causing significant harm through loss of business for the organization, loss of jobs for employees, financial loss for investors and possible retaliation against the whistleblower. It is therefore in the interest of the organisation to implement internal whistle-blowing policies to ensure corrective actions are based on ethical solutions.

    It is not true that any whistle blowing has an element of truth. In its key findings the 2010 Corporate Governance and Compliance Hotline Benchmarking Report states that “For those reports where case outcome was provided, 73% of reports in 2009 warranted an investigation with 40% of those investigations resulting in a corrective action taken.” (The Network, 2010)The report published by hotline operator THE NETWORK, provides an analysis of reports from 4,060 organizations covering the period from 2005 to 2009. From these statistics it is evident that upward of 800 whistleblowing reports were false claims or lacked evidence. The false claims could have caused harm to many organizations if the whistleblowing was external. The harm to innocent employees and investors hence to society would be extensive.

    ReplyDelete
  5. by Richard Frankis: Continued:
    Internal whistleblowing supported by good policies will minimise harm to society caused by misconduct and benefit organisations concerned about their reputation, success and sustainability. According to the Association of Certified Fraud Examiners 2010 report anonymous tips account for 47% of the detection of all fraudulent activity. (Association of Certified Fraud Examiners, 2010 ) For this reason to protect their reputation and to remain competitive all organizations should consider implementing an internal whistleblower policy. A good whistleblower policy will outline the reporting process to employees, protect whistleblowers, ensure reports are based on reasonable belief that an issue exists, ensure confidentiality and provide feedback on investigation outcomes.
    Aker, T. V. Whistleblowing and Good Governance Policies for Universities, Government Entities, and Nonprofit Organizations . http://www.nysscpa.org/cpajournal/2007/607/essentials/p58.htm.
    Association of Certified Fraud Examiners. (2010 ). 2010 Report to the Nations on Occupational Fraud and Abuse. http://www.acfe.com/rttn-international.aspx.
    Davis, M. (1966). Some paradoxes of whistleblowing Business & Professional Ethics Journal15(1), 3-19.
    The Network. (2010). 2010 Corporate Governance and Compliance Hotline Benchmarking Report. Deloittes.
    whgbetc.com. (14/05/2012). timeline-laws-policies. http://whgbetc.com/timeline-laws-policies.pdf.

    ReplyDelete