There is an increasing recognition of the need to provide ways for people to raise concerns about suspected wrongdoing by promoting internal policies and procedures which offer proper safeguards to actual and potential whistleblowers. Many organisations in both the public and private sectors now have such measures and these display a wide variety of operating modalities: in-house or outsourced, anonymous/confidential/identified, multi or single tiered, specified or open subject matter, etc. As a result of this development, a number of guidelines and (...) policy documents have been produced by authoritative bodies. This article reviews the following five documents from a management perspective, the first two deal with the principles upon which legislation might be based and the others describing good management practice: the Council of Europe Resolution 1729 (COER); Transparency International ‘Recommended Principles for Whistleblowing Legislation’ (TI); European Union Article 29 Data Protection Working Party Opinion (EUWP); International Chamber of Commerce ‘Guidelines on Whistleblowing’ (ICC); and the British Standards Institute ‘Whistleblowing arrangements Code of Practice 2008 (BSI). (shrink)

Increasingly organizations have dedicated systems and personnel (recipients) to receive and handle internal whistleblower reports. Yet, the complexity of handling whistleblower reports is often underestimated, and there is a dearth of literature that attempts to describe or analyse the challenges internal recipients face. This paper uses an agency theory inspired lens to provide insight into the complexity of internal whistleblowing, with the aim to identify focal points for improving internal whistleblowing processes. We conceive of internal recipients as agents of two (...) principals in the event of whistleblowing: owner/top management as well as whistleblowers. We identify sources of agency problems and agency costs within these double-agent relationships. We provide avenues for solving these problems and reducing the agency costs. We close by offering paths for future research. (shrink)

Whistle blowing programs have been central to numerous government, legislative, and regulatory reform efforts in recent years. To protect investors, corporate boards have instituted numerous measures to promote whistle blowing. Despite significant whistle blowing incentives, few individuals blow the whistle when presented with the opportunity. Instead, individuals often remain fallaciously silent and, in essence, become passive fraudsters themselves. Using the fraud triangle and models of moral behavior, we model and analyze fallacious silence and identify factors that may motivate an individual (...) to rationalize fallacious silence. We use a survey of graduate accounting students to test hypothesized factors that contribute to fallacious silence rationalizations in an academic setting. We find evidence that the ability to rationalize fallacious silence is related to community influences and personal traits such as awareness and moral competence. (shrink)

Historically, whistleblowing research has predominantly focused on psychological and organisational conditions of raising concerns about alleged wrongdoing. Today, however, policy makers increasingly start to look at institutional frameworks for protecting whistleblowers and responding to their concerns. This article focuses on the latter by exploring the roles that trade unions might adopt in order to improve responsiveness in the whistleblowing process. Research has consistently demonstrated that the two main reasons that deter people from reporting perceived wrongdoing are fear of retaliation and (...) a belief that the wrongdoing is unlikely to be rectified. In this article, we argue that trade unions have an important part to play in dealing with both these inhibiting factors but this requires them to be appropriately engaged in the whistleblowing process and willing to take a more proactive approach to negotiations. We use Vandekerckhove’s 3-tiered whistleblowing model and Kaine’s model of union voice level to structure our speculative analysis of the various ways in which trade unions can interact with whistleblowers and organisations they raise concerns about alleged wrongdoing in, as well as agents at a regulatory level. Our articulation of specific roles trade unions can play in the whistleblowing process uses examples from the UK as to how these trade union roles are currently linked to and embedded in employment law and whistleblowing regulation. (shrink)

The purpose of this paper is to analyse the ethical side of whistleblowing and to identify the main dilemmas generated by its practice. In the first part, the social dimension of whistleblowing has been outlined, and the defining features of reporting misconduct internally have been identified through contrasting them with those of external whistleblowing. This is followed by an attempt at an ethical evaluation of whistleblowing. The second part of this paper has been devoted to the analysis of two important (...) questions raised by the consideration of whistleblowing as a managerial instrument. Should whistleblowing be rewarded financially? Is whistleblowing not only an employee’s right, but also duty? (shrink)

Whistleblowers are a vital means of protecting society because they provide information about serious wrongdoing. And yet, people who speak up can suffer. Even so, debates on whistleblowing focus on compelling employees to come forward, often overlooking the risk involved. Theoretical understanding of whistleblowers’ post-disclosure experience is weak because tangible and material impacts are poorly understood due partly to a lack of empirical detail on the financial costs of speaking out. To address this, we present findings from a novel empirical (...) study surveying whistleblowers. We demonstrate how whistleblowers who leave their role as a result of speaking out can lose both the financial and temporal resources necessary to redevelop their livelihoods post-disclosure. We also show how associated costs involving significant legal and health expenditure can rise. Based on these insights, our first contribution is to present a new conceptual framing of post-disclosure experiences, drawing on feminist theory, that emphasizes the bodily vulnerability of whistleblowers and their families. Our second contribution repositions whistleblowing as a form of labour defending against precarity, which involves new expenses, takes significant time, and often must be carried out with depleted income. Bringing forth the intersubjective aspect of the whistleblowing experience, our study shows how both the post-disclosure survival of whistleblowers, and their capacity to speak, depend on institutional supports or, in their absence, on personal networks. By reconceptualizing post-disclosure experiences in this way—as material, embodied and intersubjective—practical implications for whistleblower advocacy and policy emerge, alongside contributions to theoretical debates. Reversing typical formulations in business ethics, we turn extant debates on the ethical duty of employees to speak up against wrongdoing on their heads. We argue instead for a responsibility to protect whistleblowers exposed to vulnerability, a duty owed by those upon whose behalf they speak. (shrink)

What form does power take in situations of retaliation against whistleblowers? In this article, we move away from dominant perspectives that see power as a resource. In place, we propose a theory of normative power and violence in whistleblower retaliation, drawing on an in-depth empirical study. This enables a deeper understanding of power as it circulates in complex processes of whistleblowing. We offer the following contributions. First, supported by empirical findings we propose a novel theoretical framing of whistleblower retaliation and (...) the role of mental health, which draws upon poststructuralist psychoanalytic thinking. Specifically, we highlight how intra- and inter-psychic affective and ambivalent attachments to organizations influence the use of normative violence in cases of whistleblower retaliation. The second contribution is empirical and builds upon the existing literature on whistleblower retaliation by highlighting how organizations position whistleblower subjects as mentally unstable and unreliable individuals, to undermine their claims. We conclude by highlighting the implications of normative power for the outcomes of whistleblower struggles. (shrink)

The purpose of this paper is to examine whether anonymous reporting channels are effective in detecting fraud against companies. Fraud, which comprises predominantly asset misappropriation, represents a key operational risk and a major cost to organisations. The fraud triangle provides a framework for developing our understanding of how ARCs can increase detection of fraud. Using publicly listed company survey data collected by KPMG in Australia—where ARCs are not mandated—we find a positive association between ARCs and reported fraud. These results indicate (...) that ARCs are effective in detecting fraud. Additional analysis reveals that small firms derive the greatest benefit from adopting ARCs. We also find that independent boards do not directly influence the detection of fraud, but companies with independent boards detect more fraud because they implement ARCs. (shrink)

One of the prevailing explanations of the corporate scandals of the Enron era and the recent financial crisis is the failure of professional gatekeepers—such as auditors, corporate lawyers, and securities analysts—to detect and disrupt corporate misconduct. The alleged solution to this failure—typically proposed and justified on consequentialist grounds—is to impose legal liability on professionals. The purpose of this paper is to critically examine the normative foundations of gatekeeper liability. In the course of this paper, I shall defend the claim that (...) gatekeeper liability may be morally objectionable not only on grounds of fairness but also on consequentialist grounds. The expected contribution of this paper is threefold. First, it systematizes the framing and moral justification of gatekeeping duties. Second, it calls into question the normative underpinnings for targeting intermediaries instead of primary wrongdoers. Third, it anticipates some negative results of gatekeeping strategies in the accounting profession, specifically in the realm of clientele selection, the expectation gap, and auditor compensation. (shrink)