Leaders who are perceived to empower their teams generate more innovative ideas and have employees who work harder and take more risks. However, this requires a culture of support and recognition. Organizations should have a clear policy that encourages whistleblowing and a culture that supports it. Policies should include legal protections, accessible reporting channels, and awareness campaigns.
Strengthening Legal Protections
Whistleblower laws need to be updated and made more effective, including by allowing individuals to report information about wrongdoing without fear of being accused of a crime. Furthermore, policies should extend the scope of protected disclosures beyond financial fraud and corporate misconduct to include issues affecting human rights, the environment, and public health. Incentives such as monetary rewards and percentages of recovered funds can also be powerful motivators.
In addition, peer counselors are needed to support whistleblowers through the often arduous process of coming forward with sensitive and complex information. A reputable law firm like Audet & Partners can help them navigate the complexities of government and private whistleblower programs, including preparing for congressional hearings or press interviews.
Moreover, they can foster the resilience required to survive the emotional and psychological distress of being a whistleblower. Empowering whistleblowers with counseling and expertise can increase the number of people who come forward to expose wrongdoing in the workplace and beyond.
Legal Framework
In a private business context, there have been limited legal avenues to bring unethical practices to light. Even in the government context, until recently, protections for whistleblowers were only available if they could prove that they suffered from some form of retaliation. It has changed due to the Sarbanes-Oxley Act, which gives employees of public companies legal protections when they report misconduct such as fraud, waste, abuse of power, or a serious risk to the public’s health or safety. But in practice, enforcing such protections has proved difficult.
Whistleblowers often suffer retaliation or do not receive the compensation they deserve for their reporting. It is partly why half a million employees choose not to blow the whistle.
A comprehensive normative and institutional framework that supports whistleblowing in reality is needed. It should broadly define whistleblowers beyond workers to shareholders, trainees, and volunteers. It should establish secure, confidential, and accessible reporting channels with hierarchical procedures, including internal reporting, disclosure to regulatory authorities, permitted external disclosures (including media, civil society organizations, trade unions, etc.), and advice tools.
It should also allow exceptions in national security and official secrets disclosures requiring special procedures. A full range of legal remedies, support and participation in investigations, rewards and recognition systems, and transparency arrangements should complement it. It should be anchored in the broader corporate culture, with the involvement of the whole workforce and a dedicated corporate responsibility office.
Internal Control Environment
Often, whistleblowers are well-informed employees who can help companies identify problems with internal controls and compliance programs. It contributes to enhanced corporate governance and accountability. It also helps weed out unethical and illegal practices that may otherwise lead to disastrous consequences for individuals and the wider public. Creating a culture of support for whistleblowers can also improve workplace morale.
It helps to alleviate stress for workers who witness misconduct or unethical behavior, and it can promote a more supportive working environment where employees are excited to come to work each day. It can also mitigate against the psychological impact of whistleblowing, as it helps to defuse tensions between supervisors and employees who might have differences in workplace styles or cultures.
Another critical aspect of empowering whistleblowers is ensuring robust legal protections. It can include safeguards against termination, demotion, or other types of discrimination. For example, the Dodd-Frank Act in the United States provides significant financial incentives to whistleblowers who report securities violations.
Transparency International has developed a tool to help organizations implement effective internal whistleblowing systems (IWS). These best practice principles have been designed to be flexible and to consider the specific needs of different sectors and jurisdictions.
Collaborative Support Systems
In addition to ensuring robust legal protections, organizations must foster collaborative support systems to help whistleblowers navigate the complex legal, financial, and emotional challenges of reporting misconduct. It can include peer counselors who can help them understand their rights and options, assist with developing a legal strategy, provide mental health support, and offer financial incentives (e.g., a percentage of recovered funds).
Whistleblowers act as an early warning system, alerting organizations to potential risks that, if left unchecked, could damage their reputation. They also serve as a critical check on organizational culture and practices, allowing leaders to correct erroneous behavior before it becomes a severe problem.
A whistleblower policy can provide employees with a clear path to raise concerns, and the organization can encourage participation by communicating that its commitment to ethical behavior and compliance are core values. It, in turn, can promote a culture of trust and responsibility. The financial and emotional costs of retaliation can be devastating for whistleblowers.
In addition to losing their jobs, they can be forced to pay hefty legal fees that strain family finances and force them to delay retirement, vacations, or other personal plans. They may also lose professional licenses, hospital privileges, or state certifications, which can significantly impact their livelihood and their families’ ability to afford essential services such as health insurance.
Recommendations
As the need for greater accountability and transparency in business becomes more pressing, organizations should encourage employees to speak out and support them when they do so. Everyone benefits from an open and supportive work culture that fosters a sense of safety for employees to report misconduct and unethical behavior.
