BLOWING THE WHISTLE – WHEN LIP SERVICE COSTS LIVES!

 The briefest internet search displays a shocking list of people killed in South Africa the last few years for blowing the whistle. Moreover, the average whistleblower has to contend with victimization, intimidation, loss of job, being overlooked for promotion, psychological and emotional stress, litigation, degradation of family and interpersonal relationships and much more. In fact, one study found that the mere knowledge of wrongdoing without actually reporting it causes a similar amount of stress on a person[1].  With so much at stake, but so much to be gained by companies where effective whistleblowing is in place[2], adopting anything but the best available will simply not suffice. To be clear, employers who pay lip service to whistleblowing are endangering the lives and livelihood of their staff and stakeholders.

There are two ways in which whistleblowing systems, for all the good they are capable of, may be prejudicial to employees. First, when the system is applied selectively and second, when it does not afford sufficient safeguards.

According to the Association of Certified Fraud Examiners in 2018, the average value of fraud perpetrated by owners against their own companies in sub-Saharan Africa exceeded that of fraud perpetrated by managers by 37 times and that of employees by 55 times[3]. In smaller companies, losses due to fraud are on average double that of larger companies i.e. more than 100 employees.  Whilst fraud perpetrated by employees may cause financial losses, the scale of damage caused by owners and executives could result in permanent closure and consequent loss of all jobs.

Despite the statistics, whistleblowing systems are generally based on a premise that wrongdoing is mostly perpetrated by employees. These systems fall flat when wrongdoing by executives is exposed, because of the power they wield in the organization and their ability to quash negative reports. If not actively anticipated and avoided, such an approach could be seen as systemic discrimination and it would be wrong to allow the continuation thereof. Negating discrimination is achieved by the proper structuring of reporting protocols to ensure that reports are not quashed, independent and objective investigative case management and affording the whistleblower every reasonable protection for doing the right thing.

Whistleblowing remains by far the most important method whereby employers are informed of wrongdoing[4], but whistleblowing is, and has been on the decline[5] for some time now. One of the reasons for this is because employers pay lip service to requirements and consequently, the systems and procedures they adopt do not adequately support professional investigation nor do they protect whistleblowers.

Here are some indicators that the employer takes whistleblowing seriously:

  • Whistleblowing forms part of the ethics arsenal of the company and is recognized and promoted as a courageous moral act;
  • Emphasis is placed on anonymity as far as possible to protect the identity of the whistleblower;
  • There are multiple reporting platforms to accommodate different reporting circumstances;
  • Two-way communication is enabled to keep the whistleblower in the loop if necessary;
  • There is a safety net of sorts which could include counselling services, legal assistance, physical protection including relocation, job guarantees or assistance with finding a new job;
  • Care is taken in the manner in which the report of wrongdoing is received and investigated to afford the whistleblower maximum protection and in particular, in the case of harassment or bullying where the complainant’s identity is known, that she/he is protected against retribution. In almost all such cases it is preferable to outsource the investigations to ensure independence and objectivity – more so when the complainant is in a subordinate position to that of the implicated person;
  • Transparent and honest reporting on all cases by the employer and guilty parties are prosecuted. Where appropriate, owners/shareholders are informed as an additional control mechanism.

Companies like to talk about their values, but there are not many ways in which they can put them on permanent display. Whistleblowing is one such opportunity.

Chris van der Walt

Ethics Africa 03 September 2020

www.ethicsafrica.co.za

 


 

[1] Physical and emotional effects of whistleblowing: McDonald S & Ahern K – US National Library of Medicine NCBI Resources.

[2] Association of Certified Fraud Examiners: Report to the Nations 2018. The median loss due to fraud in companies with fewer than 100 employees was USD 200 000 and more than 100 employees was USD 104 000.

[3] USD2,716million vs. USD 73K and 55K respectively.

[4] ACFE supra: 40% of all wrongdoing is reported via tip-off.

[5] Mail & Guardian 18/11/2016; Wall Street Journal 15 July 2020.