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Is Whistle-blowing an Ethical Act Practice?

Personal Values and Organizational Culture are the Foundation of Whistle-blowing

The ethics of whistleblowing is a tricky matter. Whistle-blowing brings two moral values, fairness and loyalty, into conflict. Doing what is fair or just (e.g., promoting an employee based on talent alone) often conflicts with showing loyalty (e.g., promoting a longstanding but unskilled employee). Taken to its extreme from a loyalty perspective, whistle-blowing may involve agonizing conflicts when, for example, it involves violating the trust of co-workers who have engaged in wrongdoing or jeopardizing one’s “team player” status by going against the prevailing winds in an organization that fosters unethical behavior.

From an ethical perspective, while loyalty is an ethical value it never should be placed above one’s ethical obligation to act responsibly and be accountability for one’s actions including reporting wrongdoing in the best interests of the organization and its stakeholders. Responsible people blow the whistle when they believe more harm than good will occur if the whistle-blower stays silent. A virtuous whistle-blower acts in an ethical manner if she truly believes a responsibility exists to protect the public interest. Such a person is willing to accept the consequences of her actions. i.e., she is accountable for her actions.

An ethical person is one who posseses strong character traits built on courage and informed by the belief that integrity is the backbone of ethical decision-making. A would-be-whistle-blower is willing to stand her ground even in the face of pressure from higher-ups to stay silent. It’s not because of the possibility of receiving a whistle-blower’s award. Instead, the whistle-blower believes in principled behavior and leads her life in accordance with ethical values.

But, what if a whistle-blower’s motive is to gain a financial reward such as is available through whistle-blowing complaints under the Federal False Claims Act and Dodd-Frank? Is it still an ethical practice?

The most important consideration in assessing whether a whistle-blower acts in an ethical manner is the intention for one’s action. Is it to right a wrong? Is it to give voice to one’s values in the face of countervailing forces? Or, is the basis for the action the pursuit of self-interests, which may manifest itself in blowing the whistle in order to cash in on the whistle-blower award? After all, greed is a powerful motivating force when considering whether to blow the whistle on financial wrongdoing.

While most would agree with the value of reporting wrongdoing and approve of good organizational governance, external contexts can color acceptance and perception. There are elements of chicken-and-egg, as attitudes that are encouraged in the workplace extend to the street -- if businesses promoted good corporate governance for all, whistle-blowing wouldn’t be viewed negatively or as solely the preserve of business or community leaders.

From a personal perspective, it could be argued that it is incongruous for human nature to display loyalty to a bureaucratic organization because it is composed of so many different people. This dehumanizing environment could distort the whistle-blower’s perception of their relevance within a company or their ability to influence change, thus degrading their sense of responsibility and motivation to report.

As long as the whistle-blower is sure that their motivations are sound and that they are confident in the system, they should not hesitate to relay such information and be pleased that they are helping to create a more ethical organization environment for stakeholders, all of whom benefit from the fair treatment, trustworthiness, and responsibility and accountability.

From an organizational perspective, it is important that even if hotlines are in place, the organization should not be complacent when it comes to its usage and communication. If a company doesn’t receive many whistle-blowing reports, it shouldn’t assume that no news is good news.

In addition, if companies don’t use the data collected from their reports in a progressive manner (analyzing trends, investigation and resolution, etc.) it negates the benefits of the service considerably. Businesses have a responsibility to the public to act on whistle-blowing intelligence or risk adverse consequences. They are additionally accountable to the governing bodies of their sector, such as the SEC, OSHA, EEOC, EPA, and other regulatory agencies.

It might seem obvious to my readers that I believe whistle-blowing is an ethical practice. After all, I blog about it all the time. I also am aware that ethics is easier said than done so it is safe to say that individual ethics are born of a culture of ethics. In an organization, this means to establish an ethical tone at the top that filters throughout and sets a standard that is enforced. The worst thing that can happen in an organization is for top management to say they believe in a code of ethics and then violate that very same code when it comes to their individual behavior.

And in a culture of ethics, whistle-blowing can come out of the cold.

Blog posted by Dr. Steven Mintz, aka Ethics Sage, on March 24, 2015. Professor Mintz is on the faculty of the Orfalea College of Business at Cal Poly San Luis Obispo. He also blogs at:

03/24/2015 in Accounting ethical standards, Business ethics, Ethical business practices, Societal ethics, Workplace ethics | Permalink |Comments (0)

Tags: business ethics, corporate governance, ethical business practices, ethical culture, ethics sage, loyalty and ethics, Steven Mintz, whistle-blowing

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