No one likes a tattletale. ‘The business of business is business’ – and why should anything interfere with this? Why defend whistleblowing? What of company loyalty? What of keeping schtum? To add insult to injury, tell-tales cost us money, too…

A Forbes report in the United States revealed corporate fines resulting from whistleblowing of three billion dollars in 2014 alone. Here in the UK the Competition and Markets Authority pays out tens of thousands in rewards to whistleblowers each year, with companies liable to fines of up to 10% of their annual turnover – and these are just the fiscal impacts. The reputational damage can also be devastating, as can the impact on company morale.

So is whistleblowing reasonable or ethical? What should companies do to prevent it happening?

The ethics of whistleblowing

Fortunately we can use a simple formula to determine the morality of whistleblowing: Whistleblowing is exactly as ethical as the practices it exposes are unethical.

If an individual discovers that the company they work for is behaving unethically, then it is the moral duty of that individual to strive to address the unethical behaviour. Company loyalty cannot trump this. So, if formal in-house escalation is infeasible or proving unsuccessful, whistleblowing becomes a moral imperative.

A simple formula: whistleblowing is exactly as ethical as the practices it exposes are unethical.

There is of course the possibility of vexatious whistleblowing – but even in scenarios where the motives of the whistleblower are questionable, if unethical practices are being exposed then the act of whistleblowing remains the right thing to do.

Unethical practices

How can we determine which practices are unethical? As discussed earlier in this series, a simple formula is again available. Behaviour is unethical if it conflicts with three uncontroversial moral objectives:

• To nurture individuals.
• To nurture humanity.
• To nurture the biological world.

The degree to which behaviour conflicts with these core moral aims, and the levels of harm ensuing, are the drivers for deciding whether whistleblowing is required.

Constraining or responding to whistleblowing

So how should businesses, executives or HR teams respond to the risk of exposure?

Let’s put ethics to one side for a moment and take a purely pragmatic approach.

It is almost always best, in any walk of life, to think before you act, and to apply the precautionary principle when you’re unsure of outcomes. With this in mind it becomes a no-brainer that the best way to pre-empt whistleblowing is to ensure your organisation is already ethical. There is no risk of exposure if you have nothing to hide.

Given that we’ve already identified a broad range of reasons for why ethical behaviour in the workplace is both profitable and sensible, it would seem our case is made. Strive for the key characteristics of the ethical business (here) and you are on safe ground.

The bigger picture

Now we come to NDAs, damage limitation and retaliatory action in regard to whistleblowers. Shouldn’t whistleblowers be constrained, or, if unwilling to cooperate, suffer penalties for their disloyalty?

In considering these scenarios it’s worth taking a step back from the suppression or confrontation of whistleblowing in favour of moral considerations. Why double down on authoritarian control when businesses around the world are moving towards a more ethical position? Instead, why not take pre-emptive, precautionary measures along the following lines: 

1. Increased worker representation at senior levels.
2. Increased communication flows in both directions of the organisational hierarchy.
3. Information sharing throughout the organisation and with the public.
4. Online forums.
5. Anonymised suggestion boxes that encourage feedback along the lines of:

• Are there better ways of doing what we do?
• Are there activities we shouldn’t be participating in?
• Are we being as collaborative, efficient and ethical as we can be?

Rita Trehan, in her article here on HRZone, Whistleblowers must be heard not silenced, makes a strong case for creating a business culture that engages with employee complaints, rather than traducing them – thus pre-empting the need for whistleblowing.

I would go further and say that any form of secrecy within the workplace is best kept to a minimum. After all, secrecy consists of the suppression of information, and such a restriction clearly conflicts with our core moral aims. You do not nurture individuals by hiding information from them. Information control is a form of manipulation, and neither the person controlling the information nor the person they seek to manipulate can be considered to have been ‘nurtured’ by this process.

More than this, secrecy creates environments where our actions are not open to moral scrutiny. In such scenarios we cannot know if others are acting ethically. We are no longer in a position where we can encourage them to take the moral option or make the moral decision. Despite this, it is our duty to encourage moral behaviour in others, and therefore secrecy actively conflicts with our duty as moral beings.      

Secrecy creates environments where our actions are not open to moral scrutiny.

Objectors may ask, ‘what of secrecy in financial transactions and negotiations? How can our financial system operate if buyers, sellers or competitors know everything about our financial situation?’

We can answer this questions by asking in reply, ‘why would you require secrecy unless you are seeking a scenario of winners and losers – unless you are hoping to get one over your buyers, sellers or competitors?’

To make someone ‘a loser’ is unethical. If we are to act ethically and nurture others then all our transactions, whether financial or otherwise, must be aimed at an outcome of win/win. We seek to benefit ourselves and advance the interests of our organisation, and there is no harm in this, but our moral duty is also to benefit others.

Our world is one of intense interconnectivity. If I create a loser, then somewhere down the line I, or the ones I care for, will in some sense lose also. In fact, the repercussions are more immediate than that, because by making you a loser I directly harm myself. I attack my own instinct for fairness. I undermine my sense of community. I attack my own morality. In contrast, in seeking win/win transactions, we nurture ourselves and nurture others also. This is how ethical businesses and colleagues behave.

For this reason, transparency and openness in all areas of business is the path we should take: with colleagues and employees; with customers and clients; with the government; and with the communities we impact and within which we work.

After all, why not be open and transparent in our actions? If we are ethical, as we surely wish to be, then we have everything to gain and nothing to hide.

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Coming soon

In my next article I will discuss ethical intelligence: what is it and why is it important? I’ll also ask, ‘how can we increase the eIQ of the organisations within which we work?’

In the meantime, please use the comments below to join this conversation and I will respond as promptly as I can.