Whistleblowing

Whistleblowing occurs when an employee or stakeholder suspects or has evidence of wrongdoing committed by other organizational actors and reports it to someone else in an effort to expose or end the wrongdoing. Whistleblowing is generally related to significant acts of organizational wrongdoing rather than minor ethical violations. These major acts may involve activities that could physically or financially harm employees, consumers, or other stakeholders; would be considered major breaches of trust with the public; or are conducted at high levels of the company hierarchy.

Corporate reputation practitioners and scholars should understand that whistleblowing cases, particularly those that become public, can bring undue attention to an organization. In many ways, a whistleblowing case can become very much like an organizational crisis that must be addressed and managed. This entry first examines why whistleblowers can threaten organizational reputations, before discussing how organizations should respond to a whistleblower’s allegations. It concludes with a discussion on legal protection for whistleblowers.

Organizational Responses to Whistleblowing

Despite government regulations and oversight, organizational wrongdoing persists as a serious societal problem. Whistleblowers represent one of the primary mechanisms by which unethical behavior is exposed. While most whistleblowers are relatively unknown and report less severe wrongdoing, a few became widely recognized after exposing major malfeasance.

Some of the more celebrated whistleblowers have seen their lives portrayed on film; they include Frank Serpico, who revealed the corruption in the New York City Police Department; Jeffrey Wigand, the chemist who reported the illegitimate business practices of the Brown & Williamson tobacco company; and Karen Silkwood, who reported the unsafe practices at a Kerr-McKee nuclear manufacturing plant. A common theme related to these and similar cases is that the accused organizations refused to listen to or to investigate the reported allegations and instead engaged in campaigns of retaliation and intimidation against the whistleblower. Indeed, when whistleblowers possess credibility, in the form of job tenure, good work performance, and documented evidence, they are more believable to the public. Whistleblowers with these characteristics possess power and can raise grave questions about an organization’s business practices. Corporate leaders should understand that whistleblowers are typically surfacing serious concerns about unethical behavior that, at a minimum, need to be investigated. The consequences of ignoring whistleblowers can be grave.

Whistleblower’s allegations can threaten the reputation and legitimacy of the targeted organization. When their concerns become public, the media, the community-at-large, and possibly government regulators are likely to have tough questions for the accused organization. The media generally find whistleblowing stories appealing because they depict a lone individual taking on a major organization, a “David versus Goliath” type of battle. Wrongdoing that could harm vulnerable populations such as children or the elderly is especially prone to raise the ire of the media and activist groups. However, organizational administrators should not make the mistake of merely trying to discredit or silence the whistleblower. Rather, they should view the whistleblowing allegations as symptomatic of ethical and communication problems within their organizations. Whistleblowers may signify that the organization’s culture is closed to dissenting or contrary viewpoints. Many whistleblowers first attempt to have their concerns addressed within the organization; it is only when they are ignored that they reach out to external audiences. Some organizations have instituted whistleblower hotlines, sending the message that they want employees to report wrongdoing so that it can be quickly investigated and eliminated.

Although there are anecdotal examples of whistleblowers making false claims, most are sincerely attempting to expose corruption. In such cases, organizations would be wise to respond quickly and thoroughly investigate the allegations, preferably using an independent party. Furthermore, organizational leaders should engage in crisis communication strategies; for example, they should communicate to their stakeholders that they take the allegations seriously, are investigating them, and will remedy the situation. Companies that smear or intimidate whistleblowers are perceived as bullies who have something to hide.

Legal Protection

Organizations should understand that whistleblowers are afforded various types of legal protection. The Sarbanes-Oxley Act of 2002 (SOX) prohibits publicly traded companies and their private contractors and subcontractors from retaliating by changing whistleblowers’ terms and conditions of employment. The Dodd-Frank Act of 2010 offers protection and confidentiality assurances for whistleblowers, including those working for private companies. For federal government employees, the Whistleblower Protection Enhancement Act safeguards employees who report particular kinds of unethical behavior, including misconduct, fraud, and illegal activity. Despite these various levels of protection, whistleblowers remain the target of retaliation. While legislation can protect whistleblowers from employment-related reprisal, it cannot protect them from more subversive types of retaliation. Both scholarly research and case studies find that whistleblowers can be ostracized, threatened, mocked, and made the target of name-calling, innuendo, death threats, and/or the silent treatment.

Conclusion

While whistleblowers are often labeled as “snitches,” “rats,” or “finks,” they are typically raising serious ethical concerns that other employees are willing to overlook. A whistleblower’s accusations should be investigated quickly and thoroughly. Unless evidence is found that they are fabricating their stories, whistleblowers should not face sanctions for their reports. Corporations should understand that they ignore whistleblowers’ concerns at their own risk.