Whistleblowing is the act of drawing attention to wrongful activities occurring within an organization (Nadler & Schulman, 2015). Some of the common ways of blowing the whistle include reporting a violation to the authorities, testifying against a company for violation of consumer safety laws, refusing to participate in a violation, and leaking critical evidence of wrongdoing to the media. Some of the global financial crises that have been experienced over the past couple of decades have also resulted in the establishment of reawakening calls to most countries introduce the necessary whistleblowing structures and systems as a measure of cracking down on organizational and corporate corruption. While some people may view organizational whistleblowing as an act of snitching, a different perspective may consider it as an act of courage and bravery that stems from dedication to integrity and ethics (Anvari et al., 2019). Simply described, whistleblowing entails the action of reporting colleagues or superior employees in an organization in connection with their involvement in misconduct. In this respect, misconduct may range from complex to minor issues. Whistleblowing helps organizations to access important information that can be used to minimize risks. What is more, a company that encourages whistleblowing deters individuals from engaging in wrongful behavior.
Whistleblowing Builds Trust in a Company’s Brand.
Employees and Customers Build Trust in a Brand or a Company
Whistleblowing is associated with the establishment of openness and transparency about operations of organizations, especially those that touch on customers' lives. Having lower levels of trust that something terrible is likely to happen to a potential whistleblower is capable of creating a more significant barrier to the spirit of whistleblowing. In building organizational trust, organizations have always been expected to ensure that their employees and customers are more confident when it comes to reporting different forms of misconduct. Training about whistleblowing is important in demonstrating the various ways through which follow-up on cases can be conducted (Vandekerckhove, 2016). Organizational whistleblowing is beneficial in the sense that it plays a critical role in supporting a reduction of losses whenever misconduct happens. The findings by Anvari et al. (2019) have shown that organizations that did not have whistleblowing systems, structures, and guidelines in place have ended up suffering from a significant amount of losses occasioned by misconducts of their staffs. Whistleblowing is also associated with building and maintaining a considerable level of trust in the brand of an organization. Stakeholders and investors are more likely to trust organizations that conduct their affairs with openness and transparency to the extent of encouraging whistleblowing. Besides, organizations that embrace whistleblowing and openness are regarded as being capable of demonstrating their commitment to higher integrity and ethical standards that have a vital role to play when it comes to building the trust of people in an organization.
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Whistleblowing Generates Trust among Employees
Organizations that choose to embrace the implementation of implement whistleblowing are often presented with crucial opportunities to access hard-to-reach and highly sensitive information concerning misconduct perpetrated by their members such as bribery, corruption, and fraud, among others. It is noteworthy that trust among employees is crucial in ensuring that a potential whistleblower gathers the courage to report any form of misconduct (Alleyne et al., 2017). Besides, it is crucial for the leadership and management in an organization to consider having systems that protect whistleblowers thus raising the level of their trust in the organizational whistleblowing system. In effect, organizational leadership has always been expected to be at the forefront when it comes to creating an environment where their employers and clients, among other stakeholders, trust the structures and processes of whistleblowing. For instance, customers would be expected to begin by building trust in the existing system before raising any concern of misconduct (Heacock & McGee, 2017). The extent to which whistleblowing generates trust among employees plays a vital role in the establishment of a more secure system that guarantees anonymity for whistleblowers. Moreover, some circumstances tend to ensure that the right personnel engages in the compilation of whistleblowing reports.
Whistleblowing helps Companies to take Care of Emerging Issues Internally.
Companies with Working Whistleblowing System
Addressing emerging internal issues at the corporate and organizational level considerably benefits from the establishment and sustainability of sound and more robust whistleblowing systems. A company with a working whistleblowing system will be the first to hear about severe violations before the media is notified (Vandekerckhove, 2016). The implementation of sound corporate governance systems is essential to the development of the culture of organizational whistleblowing. As such, taking care of emerging internal issues in an organization through whistleblowing considers the establishment of ethical behaviors among the employees. This consideration is essential in avoiding instances of harsh consequences that may be faced by potential whistleblowers in an organization.
In assisting companies to take care of their internal issues, the aspect of organizational whistleblowing ensures that organizations formulate more precise guidelines and procedures followed in the process of reporting any form of malpractice among their employees. Besides, organizations are motivated to establish more efficient systems that can support timely responses upon reporting and investigating various issues upon whistleblowing (Farooqi et al., 2017). In this respect, internal controls are reliably created through adherence to an effective timeframe throughout the investigation process. The internal controls established by embracing the culture of whistleblowing are vital in the detection of fraudulent activities as well as flagging things that may have gone astray in an organization. Employers are also encouraged to speak their minds without any fear of retaliation owing to the effectiveness of the laws meant to protect whistleblowers.
Effective Management of Internal Issues through Organizational Whistleblowing
Companies stand to benefits significantly when their leaders and managers focus on creating an organizational culture that supports internal whistleblowers. Most companies prefer handling their dirty linen internally instead of letting the whole world know about their problems. Besides, the idea of internal whistleblowing in organizations assists in inculcating ethical conduct among employees. Alleyne et al. (2017) maintain that whistleblowing is usually more effective when it is conducted and encouraged to happen within an open-door system and culture. In this respect, organizations often engage their employees to be bold in raising their concerns with the relevant authorities and departments internally. In such organizations, it becomes easier and more convenient for employees to air internal problems as well as the challenges facing their operations and activities. In this way, organizations end up being placed in better positions to address internal crisis-management problems issues.
Senior management and leadership are responsible for the establishment and setting off a trend of internal whistleblowing by making sure that ethical culture and transparency are embedded in the systems and structures within their organizations. Essentially a deeper understanding of the ethical culture and good corporate behavior are vital in ensuring that wrongdoings are easily identified and flagged by employees. There is a higher probability that the concerns raised by employees in an organization will be addressed, especially if they are directly linked to the operation of daily organizational activities (Heacock & McGee, 2017). The negative connotations associated with the aspect of whistleblowing are largely reduced or eliminated when organizations decide to have open and transparent discussions among their employees.
Whistleblowing Ensures Legal Compliance
Legal and Regulatory Compliance of Whistleblowing Systems
In ensuring legal compliance, whistleblowing plays a vital role in influencing organizations to operate within structured guidelines and regulatory requirements. In this way, organizations are capable of promoting compliance and transparency for fir and just treatment of everyone without any form of discrimination (Robert, 2018). Other than inspiring organizations to embrace legal compliance, whistleblowing encourages employees to raise concerns and make disclosures in good faith and honesty without malice. A company with a working whistleblowing system is likely to be compliant to the law as opposed to a company that does not support whistleblowing. Anvari et al. (2019) contend that whistleblowing encourages organizations to observe both ethical and legal compliance.
In this regard, whistleblowing helps in addressing various forms of wrongdoings as well as allowing justice to be done. Ensuring legal compliance is another benefit that is associated with organizational whistleblowing. In most organizations across the globe, whistleblower protection and anti-corruption laws ensure that organizations are capable of respecting the privacy of their clients while handling their personal and private data and information. In this regard, such organizations end up avoiding instances of non-compliance (Farooqi et al., 2017). Honesty and transparency among employees assist their organizations to actively participate in the realization of the mission and objectives of their organization. Besides, transparency helps in facilitating effective and clear communication in business.
Whistleblowing to Avoid Unnecessary Costs that Result from Violations of the Law
Being compliant at all times means that a company will avoid unnecessary costs that result from violations of the law (Makhija & Kulshrestha, 2018). Whistleblowing is crucial in ensuring that customers of an organization are protected against any form of violation of their rights of suffering that may be occasioned by a breach of legal requirements. Essentially, the interests of various key stakeholders are largely protected by having whistleblowing systems that are legally compliant in the sense that instances of misconduct and fraud are significantly reduced. According to Neara and Miceli (2016), the dire alternative of failing to have more effective and reliable systems of organizational whistleblowing would result in public scandals, major losses, and legal prosecution, among others. Removal of such risks is possible by embracing the culture of organizational whistleblowing while focusing on more critical organizational affairs. Fraud and corruption are associated mainly with significant financial losses. Thus, the promotion of whistleblowing plays a crucial role in the prevention of unnecessary loss of capital.
Employers' Responsibilities Regarding Whistleblowing
Encourage an Open-door policy
Employers in various organizations and corporate bodies have more significant responsibilities in ensuring that the culture and practice of whistleblowing are upheld amongst their employees. Some of the measures that can be taken by such employers include the introduction of an open-door policy. This approach plays a considerable role in eliminating the fear that is usually associated with employees facing their employers to raise various issues of concern. Most employers fear their bosses. Hence, they may not be comfortable to share critical information about wrongdoings in the company (Neara & Miceli, 2016) . Managers are encouraged to develop a culture where employees are free and comfortable to approach their superiors.
Moreover, other governments have gone to the extent of introducing a political goodwill and momentum to combat corruption. The observation by Alleyne et al. (2017) indicates that there has been increasing pressure on organizations to demonstrate higher levels of responsibility in encouraging whistleblowing and protecting whistleblowers. Business leaders in such organizations have also been held accountable concerning their performance on upholding corporate ethics. Over the last few years, the culture of organizational whistleblowing has increasingly become more popular to the extent that some governments have made it mandatory for both public and private sectors to have effective systems of whistleblowing.
Keep the Whistleblowing Policy Updated
Part of employers' responsibilities concerning organizational whistleblowing involves the development and maintenance of updated policies and guidelines (Nadler & Schulman, 2015). In that respect, the updated policies ensure that employees in an organization are commonly are more conversant with existing international standards and requirements that govern the practice of whistleblowing. Consistency is an important element of the whistleblowing process since it assists organizations to train their employees on ways of embracing the culture of integrity and honesty at work. Organizations may promote whistleblowing policies by extending the whistleblowing process to include other stakeholders such as suppliers and other partner businesses. According to Farooqi et al. (2017), organizational whistleblowing has unique features in the sense that it ensures that everyone in an organization is presented with an opportunity to air the concerns whenever they observe that something is contrary to the established ethical principles. More robust laws and regulations meant to protect whistled blowers across the globe, such as in Australia and the European Union, permit both internal and external sources of whistleblowing. For instance, there are legal protections that support the media to act as whistleblowers in organizations.
Treat Whistleblowers as Assets as Opposed to Enemies
The ways through which whistleblowers are treated is critical in determining whether the culture of whistleblowing will be rooted and thrive in an organization. For instance, potential whistleblowers are more likely to be demoralized and discouraged whenever the efforts of another whistleblower are disregarded (Makhija & Kulshrestha, 2018). Besides, organizations must consider creating a more favorable environment that is devoid of threats and intimidations for people to report any form of fraud or corruption without fear. Whistleblowers can save a company from a crisis or public embarrassment. Companies should b uild a transparent culture that protects the confidentiality of whistleblowers
Whistleblowing and Organizational Social Responsibility
Whistleblowing Bring all the Company’s Stakeholders to the Table
The establishment of robust and effective systems and structures that support whistleblowing within the organization largely demonstrate their commitment to the achievement of social responsibility. Establishment of whistleblowing policies, as well as the formulation of a culture that assists in the protection of the resources belonging to organizations, is necessary for supporting the various social responsibility aspects of such organizations. Whistleblowing brings all the company's stakeholders to the table. As such, it leads to a pure decision making and implementation process (Makhija & Kulshrestha, 2018).
Whistleblowing Enhances the Working Environment of the Firm
The working environment of a firm or an organization can be significantly enhanced through the introduction of a more robust structural framework that supports whistleblowing. In this way, such organizations remain protected and secure from different forms of financial misappropriation as well as civil or criminal liabilities that are capable of causing serious damages to the corporate reputation of organizations (Alleyne et al., 2017). Several justifications are linked to the attainment of social responsibility based on the ability of organizations to pursue the realization of more robust whistleblowing structures and frameworks. Whereas the aspects of legitimization of whistleblowing within organizations propose the adaptation of organizations by members of the public opinion, corporate social responsibility plays a critical role in the examination of a wider range of whistleblowing policies.
Examples of Whistleblowing Policies in Different Parts of the World
United States
Whistleblower Protection Act was expected to protect all federal employees who lawfully disclose information regarding gross mismanagement, abuse of office, a violation of laws and regulations, or specific danger to public safety (the United States Consumer Product Safety Commission). Besides, the enactment of the Whistleblower Protection Act of 1989 in the United States was aimed at protecting federal employees who would disclose incidences of corruption, wastage, and illegality among other forms of misconduct within the government. In this regard, the Whistleblower Protection Act became more useful in ensuring that such employees would not be subjected to victimizations in the form of dismissal, replacement, pay cuts, and demotion, among others. Another set of whistleblowing policies in the United States was provided through the Whistleblower Protection Enhancement Act, which is an updated version of the Whistleblower Protection Act.
United Kingdom
The Public Disclosure Act (1998) was enacted in the United Kingdom, with the primary objective of protecting whistleblowers against experiencing detrimental and discriminatory treatment from their employers. The Public Disclosure Act was enforced and became operational in 1999 upon receiving the Royal Assent. It is noteworthy that the Public Interest Disclosure Act played a critical role in setting out conditions under which whistleblowing may be considered as acceptable. It also protects workers against reprisals for coming forward (Anvari et al., 2019). Before the enactment of this particular act, whistleblowers in the United Kingdom were not enjoying any form of protection against victimization and manipulation by their employers even though it was not possible for them to be sued for breaching privacy. Essentially, there was a public interest defense that stood firm against open or subtle victimization of people in their places of work.
Australia
The Corporations Act 2001 , also referred to as CA 2001 in Australia, was aimed at setting out laws and guidelines that would be necessary while dealing with various business entities at the interstate and federal levels. The Corporations Act forms the principal legislation that is responsible for the regulation of actions and activities such as whistleblowing by organizations in Australia . Taxation was meant to assist taxpayers in meeting the tax liability associated with their annual income tax. In this regard, the taxpayers are expected to pay certain amounts of their yearly income at intervals regularly. Any company that breaches the confidentiality of a whistleblower may be required to pay a fine of $10.5 million (Farooqi et al., 2017).
Conclusion
Whistleblowing helps organizations to access important information that can be used to minimize risks. Moreover, a company that encourages whistleblowing deters individuals from engaging in wrongful behavior. Whistleblowers have for long been considered as traitors or mere attention seekers. However, companies have realized that whistleblowing is an important component of success. Whistleblowers help companies to adhere to legal requirements and to build trust among its employees and customers. It is for these reasons that most companies have given up the fight against whistleblowers, and instead internalized whistleblowing processes. Whistleblowing is also associated with building and maintaining a considerable level of trust in the brand of an organization. Training about whistleblowing is important in demonstrating the various ways through which follow-up on cases can be conducted.
It is noteworthy that organizations may promote whistleblowing policies by extending the whistleblowing process to include other stakeholders such as suppliers and other partner businesses. Thus, organizations need to consider creating a more favorable environment that is devoid of threats and intimidations for people to report any form of fraud or corruption without fear. Organizations remain protected and secure from different forms of financial misappropriation as well as civil or criminal liabilities through whistleblowing. Corporate social responsibility plays a critical role in the examination of a wider range of whistleblowing policies. Whistleblower protection and anti-corruption laws ensure that organizations are capable of respecting the privacy of their clients while handling their personal and private data and information.
References
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