The Whistleblowing Guide

Speak-up Arrangements, Challenges and Best Practices

Kate Kenny, Wim Vandekerckhove, Marianna Fotaki

• Publisher: Wiley
• Year: 2019
• ISBN:
  9781119360780
• Edition: 1
• Topic: Economics
• Subtopic: Banks & Banking
• Index: Economics

Choose the best speak-up arrangements for your organisation

The last five years have seen dramatic and fundamental changes in whistleblower procedures for organisations. Prompted by a spate of important public disclosures, organizations are now mandated by law to implement effective arrangements enabling employees to speak up about perceived wrongdoing. Currently few resources exist to help with this.

To help fill the gap, The Whistleblowing Guide examines the opportunities and challenges associated with different types of whistleblowing and speak-up arrangements, making recommendations based on best practices you can trust.

• Identifies the major organisational, structural and cultural obstacles to speaking up through speak-up arrangements
• Proposes effective whistleblowing and speak-up arrangements
• Explains the specific policy and legislation requirements that can promote or impede the effective implementation of speak-up arrangements, and how these can be translated into commercial and public organizations across sectors and cultures
• Makes a clear distinction between internal and external reporting arrangements

The Whistleblowing Guide offers conceptual clarification about these key issues, including a focus on internal and external speak-up procedures, organisational response and communication, impartiality and trust.

CHAPTER 1
Introduction: The Importance of Speak‐up Arrangements

SPEAKING UP IN ORGANIZATIONS

Recent years have seen dramatic and fundamental changes in whistleblower procedures for organizations. Prompted by a spate of important public disclosures, organizations are now mandated by law in various countries to implement effective arrangements enabling employees to speak up about perceived wrongdoing. Yet few resources exist to help with this. To fill the gap, this book examines the opportunities and challenges associated with different types of whistleblowing arrangements (often called speak‐up systems), and makes recommendations based on best practice. Our proposed model for the effective development of sustainable speak‐up systems is rigorously grounded in new, empirical, international research, in a variety of organizational settings along with existing academic literature on the issue.

Whistleblowing forms a key means of addressing dangerous wrongdoing and illegal behaviour in today's organizations. The absence of effective speak‐up arrangements prevents organizations and societies from avoiding major disasters. Attempts to alert the authorities to wrongdoing by internal personnel are currently on the increase. However, in many cases, suffering and retaliation experienced by whistleblowers is exacerbated because few if any procedures are in place to receive and follow up on concerns raised by employees. Even when systems are in place, they are often bypassed, and the whistleblower is silenced or over‐ruled, as was the case in the Deepwater Horizon oil spill, the collapse of Enron, and the nuclear meltdown after the Fukushima earthquake, for example.¹ Whistleblowing has become an important issue, both for societies, as well as for organizations.

Speak‐up arrangements can have economic benefits for organizations and society. They also save money both for private and public sector organizations. A recent study of over 5,000 firms shows that 40% of companies surveyed suffered from serious economic crimes that averaged over $3 million each in losses. Whistleblowers exposed 43% of these crimes, which means that whistleblowing was more effective than all the other measures combined: corporate security, internal audits, and law enforcement.² Workers who voice their concern can help to prevent the dysfunctional behaviour that leads to financial and reputational losses by firms and public sector organizations. Ineffective speak‐up arrangements, however, limit their ability to do this, and ultimately harm the organization as well as the whistleblower.

The question of how to develop effective speak‐up arrangements has become urgent. There is increased media attention for whistleblowers, and policy‐makers across the world have lobbied to pass legislation protecting whistleblowers. Although legislation is essential for encouraging speaking up against wrongdoing, it has also drawn our attention to the missing link—that of the organization and its internal arrangements in place for making disclosures. Hence, implementing effective speak‐up arrangements is now a vital part of reforming corporate governance, public sector accountability, and professional responsibility. With this book, we hope to contribute to the success of these reforms.

Until now, whistleblowing has mainly been researched from the point of view of the whistleblower. Our research is innovative because it provides insights into speaking‐up from the perspective of those who operate the speak‐up arrangements.

SPEAK UP ARRANGEMENTS: A NEW PERSPECTIVE FOR THEORY AND PRACTICE

This book offers valuable contributions for academic researchers, professional audiences and managers. It is unique because, unlike other studies and guides, it focuses on the context as well as the organization. We find that these aspects, including legislation cultural norms and economic structures, significantly influence the ways in which speak‐up systems are implemented and used ‘on the ground’. Our analytic framing allows us to encompass both this ‘macro’ focus but also a micro‐level examination of how such systems are used in the day‐to‐day activities of those tasked with receiving disclosures.

We find that existing studies of speak‐up arrangements are somewhat limited in that they simplify what are, in reality, complex organizational dynamics. The linear, process‐oriented models proposed by many scholars fail to capture the fact that speak‐up attempts are made in organizational settings in which business‐as‐usual continues, even when operators are trying to deal with disclosures. Real‐life speak‐ups rarely if ever progress in a simple fashion: from disclosure, to remedy, to sanction of the wrongdoer. Our research highlights how attempts to achieve each stage are, in practice, made against a backdrop of organizational norms and structures that can represent obstacles to the successful disclosure and resolution of wrongdoing. Moreover, where substantial attempts to remedy a wrongdoing are poorly managed, this can generate paralysis across the organization as an investigation proceeds.

This book also encompasses rich background detail on three important sectors of the economy, currently under the spotlight in the area of speak‐up systems not least because of recent scandals: financial services, healthcare and engineering. It includes multinational and national perspectives and examples from both public and private sectors.

Through our analysis of practices across a variety of organizational settings, we offer novel and important insights into commonly misunderstood aspects of internal whistleblowing. We show, for example, how a lack of response, or silence, by the person who receives a disclosure, can be misunderstood by the person speaking up. The person can interpret this as a lack of interest in the wrongdoing, or worse, an indication of their impending marginalization by the organization. This situation is not uncommon. Thus, the onus is on the organization to instill and maintain a culture of responsiveness among managers tasked with receiving speak‐ups.

In summary, implementing sustainable speak‐up systems in organizations is more complex and intricate than often thought. It involves an intersection of human, technological and organizational dynamics that impact on each other in many ways, through the introduction and use of such arrangements. Radically new perspectives are needed to understand these aspects and to apply them successfully in our organizations. Our research shows how a speak‐up arrangement can be implemented successfully. This can be done to ensure retaliation against whistleblowers is minimized, while speak‐up operators provide effective and timely feedback to those who raise concerns. Moreover, by showing how speak‐up operators attempt to overcome obstacles, we highlight the vital role trust plays for building a culture of openness and transparency in their organizations.

Through the detailed analysis we provide, our study is unusual in that it distills best‐practice recommendations by combining both empirical analysis and a detailed review of the relevant literature on the topic, a strategy that enables us to develop a unique and valuable framework by which to understand speak‐up arrangements in contemporary organizations.

SUSTAINABLE SPEAK‐UP SYSTEMS: A MODEL

This book brings together a variety of perspectives to create a model for the development of sustainable speak‐up systems. The key success factors in achieving this are independence, responsiveness, and time. Each of these is explained more fully later in this book.

• Independence: The independence of the speak‐up recipient is key. Employees are more likely to speak up to a recipient that is removed from the wrongdoing.
• Responsiveness: Employees must perceive that their report is being acted on, for speak‐up arrangements to work. There are sometimes barriers to how responsive the organization can be.
• Time: The preferred channel for speaking up can change with time, as employees get used to the systems that are in place.

To enable independence, to enhance responsiveness, and to support speak‐up systems over time, certain contextual features must be present. These are ethical culture and trust.

Ethical culture describes the environment inside an organization that enables and constrains various types of whistleblowing. Kaptein's work in this area for example shows how culture has an impact on how employees speak up, and to whom, whereas Roberts and colleagues show how these dynamics can enhance the success of speak‐up systems. As a result of the analysis developed throughout this book, we add trust to this vital aspect....

Table of contents

• Cover
• Table of Contents
• About the Companion Website
• CHAPTER 1: Introduction: The Importance of Speak‐up Arrangements
• CHAPTER 2: Why Speak‐up Systems: Why Now?
• CHAPTER 3: A Comparative Study of Speak‐up Arrangements in Banking, Engineering, and Healthcare Sectors
• CHAPTER 4: Challenges and Obstacles to Effective Speak‐up Arrangements
• CHAPTER 5: Speak‐up Procedures: A Guide for Professionals
• CHAPTER 6: Conclusions
• Bibliography
• APPENDIX 1: Speak‐up Arrangements – Key Theories
• APPENDIX 2: Project Methodology
• APPENDIX 3: Other Resources
• Index
• End User License Agreement