The cost of whistleblowing
No one likes a tattle-tale. ‘The business of business is business’ – and why should anything interfere with this? Why defend whistleblowing? What of company loyalty? What of keeping shtum? And, to add insult to injury, tell-tales cost us money, too…
A Forbes report in the United States revealed corporate fines resulting from whistleblowing of three billion dollars in 2014 alone. Here in the UK the Competition and Markets Authority pays out tens of thousands in rewards to whistleblowers each year, with companies liable to fines of up to 10% of their annual turnover. And these are just the fiscal impacts. The reputational damage can also be devastating, as can the impact on company morale.
So is whistleblowing reasonable or ethical? And what should companies do to prevent it happening?
The ethics of whistleblowing
Fortunately we can use a simple formula to determine the morality of whistleblowing:
Whistleblowing is exactly as ethical as the practices it exposes are unethical
If an individual discovers that the company they work for is behaving unethically, or that individuals or groups within their company are engaged in unethical practices, then it is the moral duty of that individual to strive to address this behaviour. Company loyalty cannot trump this. So, if formal in-house escalation is infeasible, or if it is proving unsuccessful or being ignored, whistleblowing becomes a moral imperative.
A simple formula
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Whistleblowing is exactly as ethical as the practices it exposes are unethical
There is of course the possibility of vexatious whistleblowing – whistleblowing to settle scores – but even in scenarios where the motives of the whistleblower are questionable, if unethical practices are being exposed then the act of whistleblowing remains the right thing to do.
Unethical practices
How can we determine which practices are unethical? As discussed earlier in this series, a simple formula is again available. Behaviour is unethical if it conflicts with three very basic and uncontroversial moral objectives:
The degree to which behaviour conflicts with these core moral aims, and the levels of harm ensuing, are the drivers for deciding whether whistleblowing is or is not required.
Constraining or responding to whistleblowing
So how should businesses, execs or HR teams respond to the risk of exposure?
Let’s put ethics to one side for a moment and take a purely pragmatic approach.
It is almost always best, in any walk of life, to think before you act, and to apply the precautionary principle when you’re unsure of outcomes. With this in mind it becomes a no-brainer that the best way to pre-empt whistleblowing is to ensure your organisation is already ethical. There is no risk of exposure if you have nothing to hide.
Given that we’ve already identified a broad range of reasons for why ethical behaviour in the workplace can be both profitable and sensible, it would seem our case is made. Strive for the key characteristics of the ethical business (here) and you are on safe ground.
This raises a challenge we’ve come across before. Are we being ethical merely for selfish reasons – namely, for the success of the business?
My answer to this challenge is always the same: So what?
It is true you ought to be moral because that’s what morality demands of you – that the moral imperative alone determines whether your actions or decisions are ethical. But moral logic does not mean there can be no pragmatic or selfish benefit from your actions. It’s an apples and pears scenario. All ethical codes instruct us to ‘be moral’, and whether costs or benefits are incurred is incidental. You must be moral, whether or not this advances the interests of yourself or your employers. But if you interests are also advanced, that’s not a problem. It’s merely serendipity.
The bigger picture
Now we come to NDAs, damage limitation and retaliatory action in regard to whistleblowers or potential whistleblowers. Shouldn’t whistleblowers be constrained, or, if unwilling to cooperate, suffer penalties for their disloyalty?
In considering these scenarios it’s worth taking a step back from the suppression or confrontation of whistleblowing in favour of moral considerations. Why double down on authoritarian control when businesses around the world are moving towards a more ethical position? Instead, why not take pre-emptive, precautionary measures along the following lines:
Rita Trehan, in her article here on HRZone ‘Whistleblowers must be heard not silenced’, puts a strong case for creating an open business culture which respects and engages with employee complaints, rather than traducing or ignoring them – thus pre-empting the need for whistleblowing.
I would go further and say that any form of secrecy within the workplace is best kept to a minimum. After all, secrecy consists of the omission or suppression of information, and such a restriction clearly conflicts with our core moral aims. You do not nurture individuals by hiding information from them. Information control is a form of manipulation, and neither the person controlling the information nor the person they seek to manipulate through this control can be considered to be ‘nurtured’ by this process.
More than this, secrecy creates environments where our actions are not open to moral scrutiny. In such scenarios we cannot know if others are acting ethically. We are no longer in a position where we can encourage them to take the moral option or make the moral decision. Yet it is our duty to be moral and to encourage moral behaviour in others… therefore secrecy actively conflicts with our duty as moral beings.
Objectors may ask, ‘What of secrecy in financial transactions and negotiations? How can our financial system operate if buyers, sellers or competitors know everything about our financial situation?’
We can answer this questions by asking in reply, ‘Why would you require secrecy unless you are seeking a scenario of winners and losers – unless you are hoping to ‘get one over’ your buyers, sellers or competitors?’
To make someone ‘a loser’ is unethical. If we are to act ethically and nurture others then all our transactions, whether financial or otherwise, must be aimed at an outcome of win-win. We are seeking to benefit ourselves and advance the interests of our organisation, and there is no harm in this, but our moral duty is also to benefit others. Our world is one of intense interconnectivity. If I create a loser, then somewhere down the line I or the ones I care for will in some sense lose also. In fact, the repercussions are more immediate than that, because by making you a loser I directly harm myself. I attack my own instinct for fairness. I undermine my sense of community. I attack my own morality. In contrast, in seeking win-win transactions, we nurture ourselves and nurture others also. This is how ethical businesses and colleagues behave.
Why create losers?
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Win-win outcomes are good for all of us. Win-lose scenarios harm us all
For this reason, transparency and openness in all areas of business is the path we should take: with colleagues and employees; with customers and clients; with the government; and with the communities we impact and within which we work.
After all, why not be open and transparent in our actions?
If we are ethical, as we must surely wish to be, then we have nothing to hide.
Coming soon
In my next article I discuss ethical intelligence, what it is and why it is important. And I ask, ‘How can we increase the eIQ of the organisations within which we work?’
About the Author:
Luke Andreski is a writer with over thirty years’ experience in the IT industry, specialising in People Technology implementation projects and change management. More recently he has focused on moral philosophy and psychology, with a particular interest in business leadership and management ethics.
Luke has published two books on ethics: Ethical Intelligence, a guide to effective ethical thinking in a world of polarised belief and political spin; and Intelligent Ethics, exploring the need for ethical change if we are to address the challenges of the 21st Century.
He is currently working in conjunction with Phase 3 on a series of articles investigating Ethics in the Workplace.
Laura’s role as Head of Marketing sees her continually looking for new opportunities to tell the world how great Phase 3 is.
