Whistleblowing means speaking up when you see something that is unethical, or illegal happen – whether in your workplace, at a business partner, or in some public institution. These actions can be from exposing fraud, calling out health and safety risks, or even reporting criminal activities like corruption. The whistleblower might be an impact individual, a contributing individual, or an observing individual.
Whistleblowing comes in many forms, at times as reporting safety violations by an employee in a factory, other times as high-profile cases revealing the wrongdoing of the government. What bonds them together, however, is an action to unmask misdeeds for the greater good.
The Legal Dimensions of Whistleblowing
There are laws to safeguard the rights of whistleblowers. For example, the EU Whistleblowing Directive aims to protect whistleblowers across the EU. The law bars workers from losing jobs or mistreatment over reporting something illegal or unethical. That is a very important protection because otherwise, people might be too afraid to speak up.
Despite these laws, whistleblowers continue to face retaliation. Even under legal protection, some whistleblowers continued to be subjected to hostile treatment. It was reported by E&E News on 18 September 2024 that a federal watchdog group criticised the U.S. Environmental Protection Agency (EPA) for allegedly retaliating against its own scientists by suppressing scientific reviews related to chemical safety assessments that could undermine public health protection. The whistleblowers were reassigned, skipped for promotions, and generally harassed by senior-level managers.
That is also why it is so important that organisations take proactive steps to create a supportive reporting environment – one where employees can come forward confidently, knowing they will not face retribution.
Types of Whistleblowing
There are various ways through which a whistleblower can report the incident, and those quite often vary depending on the context in which an incident has occurred.
Internal Whistleblowing
Whistleblowing can be internal when one reports wrongdoings to a higher power in the company. Usually, organisations have policies in place to enable their employees to raise concerns in confidence that their identity is always kept confidential.
External Whistleblowing
Sometimes, the problem is too big to deal with internally, or the organisation itself is the problem. Whistleblowers go external: They take their information to the regulators, the media, or law enforcement. Often, it is at this point that there is broader public awareness and, depending on the severity of the case, legal consequences.
Why Whistleblowing Is Important
Preventing Malpractices
It is important to note that one of the major advantages of whistleblowing is that it may serve to bring fraudulent practices and other harmful activities to light. Clearly, if wrongdoers realise that they may be reported, then they are less likely to commit their illegal acts in the first place. Whistleblowing holds people accountable and makes organisations take corrective action.
Decrease Risks and Costs
The higher the amount of fraud or malfeasance left unreported, the greater the risk there is for a company. Unaddressed wrongdoing exposes an organisation to extended legal battles, damaged reputations of the company, and enormous fines.
One good example is the Wells Fargo case. In 2016, Wells Fargo employees opened millions of unauthorised accounts in customers’ names without their consent. When such practices were exposed, Wells Fargo faced legal consequences. It was fined USD 185 million.
By promoting whistleblowing policies, companies are most likely to identify such problems early and limit financial losses while reducing reputational damage.
Fostering a Trustworthy and Safe Workplace
When an organisation is open to transparency and accountability, it is then that employees can develop trust in it. People want to feel safe working with a company that will have their back; knowing a company takes whistleblowing seriously goes a long way in developing that trust. So, it comes full circle: a healthy work environment equates to a happy, productive employee.
Brand Reputation Preservation
Bad publicity is never good for business. Whistleblowing, instead, can help avert disastrous situations where issues are brought to light early enough for the company to take a chance on mending its ways before they explode into public scandals.
One example of whistleblowing that damaged a brand reputation is the Volkswagen Dieselgate scandal. In September 2015, Volkswagen admitted that it installed software in millions of its diesel vehicles so that they could pass emissions tests while actually emitting pollutants far exceeding legal limits during normal operation. This had a long lasting impact on consumer trust and brand loyalty.
Encouraging a Whistleblowing Culture
It means that whistleblowing provides enormous benefits in maintaining the ethical grounds of organisations and keeping their functions in check. Therefore, companies should create a culture that fosters openness and protects employees from fear when blowing the whistle. When people are empowered to call out wrongdoing, it leads to better decision-making, a stronger brand, and a more successful business.
Whistleblowing is not just fraud prevention; it is about protecting workplace integrity, ensuring equity for all with regard to standards. We must offer support to those brave enough to speak out.
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