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Whistleblowing: Whistleblowers
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The authors agree with the commentary in The CPA Journal (Mary-Jo Kranacher, “Whistleblowing: The Devil in the Details,” July 2006) that whistleblowing can significantly affect a whistleblower’s life and livelihood. The authors believe that the potentially huge personal impact whistleblowing can have on individual whistleblowers means there is an even greater need for organizations to develop clear whistleblower policies.
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Two issues are explored in this essay, whistleblowing and corruption. They are related. Whistleblowing can be regarded as a useful tool to lower the incidence of corruption. In Singapore for instance, whistleblowers gave tip-offs and detailed accounts of firms’ wrongdoings to the Corrupt Practices Investigation Bureau (CPIB). A total of 540 cases of corruption were reported in the first ten months of 2003.
Cyberspace provides a new dimension along which to examine whistleblowing. The web offers a wealth of information on whistleblowing, although the quality and source is in many instances somewhat uncertain. Whistleblowing continues to be portrayed as a solitary, even heroic act. And while legal sites may emphasize that large economic rewards are possible for the whistleblower, the costs of whistleblowing are vividly presented, typically by the whistleblowers themselves. The Internet affords whistleblowers with an opportunity to again make their case, and in so doing, to perhaps pursue ends that are variously altruistic, self-serving, and even therapeutic.
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Given the prevalence of corporate misconduct in the recent past, whistleblowing incidents have been on the rise. A 2002 article in Business Week called 2002 the "Year of the Whistleblower" and quoted Stephen Meagher, a former federal prosecutor who represents whistleblowers, as saying that "the business of whistleblowing is booming." This trend is likely to be bolstered by the provisions of the Sarbanes-Oxley Act, which for the first time, accords legal protections to whistleblowers in publicly traded companies. This means organizations will have to institute rigorous policies to allow employees to bring unethical and illegal practices to the forefront. Companies will have to train managers and executives on how to encourage openness, not unlike the sexual harassment training of a decade ago. Putting processes in place will not be quick, but it is certainly necessary given the increased public scrutiny of corporate behavior.
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The act of whistleblowing identifies serious deficiencies in the structure of an organisation. Davis (1989:7-8) points out that whistleblowing is evidence of the inadequacy of the communication channels in the organisation. It is ... evidence of the failure of management to deal satisfactorily with the whistleblower’s complaint. Moreover those against whom the complaint is laid have to spend a lot of time in damage control and explanations of what has happened. Whistleblowers move from being loyal employees to people who feel that the organisation has betrayed them. This means that they now distrust the organisation and do not recognise the authority of the organisation.
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Almost all the laws relating to whistleblowing entered into force recently. The decline in the implementation of whistleblowing strategies is consequently due to the obtained results, which continue to be small in number. It is rare to find an evaluation system that exists to monitor the laws put into place. For example in the United Kingdom there is no mechanism similar to PIDA in existence. The lone available device lies in the complaints that whistleblowers have lodged with the courts, after reprisals (of which they were victims) have occurred. The figures proposed are thought to be representative of the actual number of whistleblowers that have come forward to lodge a complaint.
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