World Review | Whistle-blowers can help government and business

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Whistle-blowers can help government and business

Whistle-blowers can help government and business
Protesters have campaigned on behalf of whistle-blowers like Wikileaks (photo:dpa)

REVELATIONS by whistle-blower Edward Snowden - the American computer specialist who leaked top-secret details about mass surveillance programmes by the United States and Britain - has again underscored the tensions between the notion of complicity in criminal behaviour and the idea of loyalty to an employer or a country.

The fundamental principle is clear enough - it is wrong to collude in criminal activity or to fail to report other individuals’ criminal intents or actions.

Edward Snowden worked for the CIA and the National Security Agency, and the NSA scandal and the ongoing saga of leaks by the online organisation Wikileaks, have drawn attention to the relationship between individuals and governments.

They have also raised the question of whether the government is bound to the same general principles as individuals, and if so, whether a citizen should be praised for exposing the government’s misconduct.

What can we learn from the world of business, where an employee who breaks his duty of loyalty is known as a whistle-blower? A whistle-blower is an employee who believes that their company is involved in misconduct, such as forging the accounts, and breaks their commitment to secrecy by informing the outside world about what is happening, or they believe is going on.

Whistle-blowing is certainly commendable. Basic moral principles, like ‘no cheating’, should always prevail against contractual agreements and practices. Telling a lie or keeping quiet because your employer has asked you to is no excuse. Loyalty to morally despicable action is not loyalty but collusion.

Public opinion is kind towards whistle-blowers. They are generally perceived as brave employees willing to challenge their superiors - and risk the consequences - for the sake of honesty, transparency and accountability.

Governments also tend to favour and protect whistle-blowers especially when the corporate hierarchy decides to cover up wrongdoings.

Whistle-blowers are not informers, they are the way that wrongdoing is exposed.

But not everyone loves whistle-blowers and there are reasons that justify prudence. The first is that reported wrong-doings are not always evident. Sometimes the principled, whistle-blowing employee can make a mistake.

In a similar vein, the well-meaning employee can fail to see the difference between what is undesirable or inappropriate, and what is illegal.

And not all whistle-blowers are saints. They may take advantage of their role as potential troublemakers to blackmail even when no crime has been committed.

Excessive or devious whistle-blowing can thus lead to unwelcome consequences and virtually paralyse both the world of corporate business and the judicial system.

Whistle-blowing is welcome when it rests on solid moral ground - compliance with indisputable ethical principles - and relates to wrongdoing which could provoke substantial damage to a large number of individuals.

Legislation can do little to promote good whistle-blowing and discourage troublemakers.

The ideal whistle-blowers are company directors. But everybody knows that corporate management is traditionally very good at developing ways of keeping their board of directors in the dark.

So there are three lessons for the future:

We can predict that competition will ensure that the role of whistle-blowers will grow dramatically in the world of business. Directors have been unwilling to listen to whistle-blowers and therefore unable to pick up the signals which should have led them to investigate potential wrongdoing.

If shareholders and the media pay more attention to whistle-blowing, however, the world of corporate governance may change significantly. Directors will no longer be content with approving what the owners and senior management suggest as they will learn to serve the owners by listening to what the junior management has to signal.

Although much of the publicity about whistle-blowing literature has focussed on corporations, governments should acknowledge that the civil service could benefit considerably from effective whistle-blowing.

There is no doubt that public administration is full of waste through people shirking and other forms of misconduct.

Of course we all care about job security and heroes are in short supply, but does the public sector do all it can to encourage its workers to stop turning a blind eye to their superiors’ misconduct and serve the common good by blowing the whistle?

Professor Enrico Colombatto

ENRICO Colombatto is a professor of economics at the University of Turin, Italy. Professor Colombatto is also Director of the International Centre for Economic Research (ICER) in Turin an ...

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