ALIN, mMMitUNe ound Corr 9s is ie} er 2 7+ = enutlet WAS Novernet cation. Whistle-Blowing: Ustening to the Inner Voice 477 LEARNING OBJECTIVES After Studying. this ch; 4 apter, you should be Explain the me. able to: la ‘aning of the term ‘w histle-blowing.’ * Highlight the Salient features of whistle-blowing, | © Identify the usual Subjects for whistle . -blowing, or not whistle-blowing, and how to successfully blow Corroborate y of whistle-blo Justify whether * Know when whistle. our knowledge and underst fanding with some actual cases wing in business world. g is an old concept but relatively new term. History is potas have always been informers, or snitches, who reveal inside informa 7 | ‘| t to Business world is not exception to it. It will not be less than correc! mention t) that there h | | | Whistle-blowin, } to others. | ] tripe i histle- that unethical practices, or say, wrongdoings in business and w! 0 blowing have been coe:al since long time. Only the extent and nature of pee have changed over the period. Alongwith increase in unethical eee pedi ms instances of whistle-blowing is also on increase though not oe Dee nas regards what is whistle-blowing, like other ethical driven human bel ee also been understood and defined differently by different Reel a eee Se ethicists. For some, whistle-blowing may mean the disclosure o} wees Being some others protest against unethical doings, and for some yet untoward things to others. i ae It’s a cliché to mention that there have been pleting oe ey wrongdoings, and unethical practices in business, ele aed whistle-blowers, but unfortunately that is the case. a difficult seek. Cases of whistle-blowing are so wrenching ee very sharp and strong conflicts and serious ae s evidences to confirm that whistle-blowers often pay a ~ from poor evaluation and demotion to ae 1 Given such backdrop, then, certain opi a vexing employees violate their obligation to be loy: Tae confidential matters of one’s organization: be really encouraged to blow the whistle: st rhis' rsonal sacrifices? Should the wl fone? The present chapter makes ap questions. We shall begin with def The term whistle-blowing umpire who draws public att% oe TREE ive beeoereeeane = ‘3. Whistle must be blown wi Perea ipublic for all sorts of reason as in soccer. Some trace out its emergence from the practice of English Bobbieg scho would blow their whistle when they noticed the commission of a crime, blowing of the whistle would alert both law enforcement officers and the genera, public of danger. In simple words, whistle-blowing is an act by a member or former tember of an organization to disclose wrongdoing in or by the organization. Lot Us consider some important definitions of whistle-blowing that will help us bet m ‘According to Boatright (2003: 104), “Whistle-blowing is the release of blowing.” Te nee ery like a journalist, information by a member or former member of an organization that is evidence organization by outsider owing. J and/or immoral conduct in the organization that is not in the public Cee eo cag, wuornationdaleee aie ce and no obligation prevents them from making it p' Sekhar (2002: 179) defines whistle-blowing as “an attempt by an employee and no obligation Payees whe, of Course, ae a ora former employee of an organization to disclose what he proclaims (© be a Seer rtiraniona, but at the same time, they wrongdoing in or by that organization.” Laer eee eriens. That is employees are expec According to Koehn (2003: 4567), “Whistle-blowing occurs when an employee determined and agreed directives, £0 informs the public of inappropriate activities going on inside the organization,” act in manner that benefits the R. M. Green (1994: 145-146) has given a simpler definition of whistte-blowing «nation hat tales place in ae . It must be clear to whom the whistle 1 bers of an org ijformation released to public wit institute Whistle-blowing gdoing of an member. Infor 1 member of fh a motive to tal Attimes, Therefore, does not cor 4. Whistle against wron, its member or former “A whistle-blower is an employee who, perceiving an organizational practice thet he believes to be illegal or unethical, seeks to stop this practice by alerting top blown. Only then a desired change oF & management, of failing that, by notifying authorities outside the organization. Merely revealing, information about » Considering the above definitions together, whistle-blowing can now be docs not nesesee ty os defined in a long-winded manner as the voluntarily disclosure of non-public aa ei < ;: 6. The information about the fora inc ag tral pe ctoct bye acaenbes ox fertece perenea tae heed : culside the nermall channels of communicators tocutitars win egn este etre cclesied Sata Prcerigine cepacia weenie needs ees Salient Characteristics immediate superiors oF to ollselSsiane ic cate haraestanlés a sp ete Bar ener ae “Ue Tasirane’ Go whistle-blowing: ee = 1. ‘There must be feal information to release to be called “whistle-blewing roland That is merely to dissent publicly with an employer without the real information is not in itself to blow the whistle. Whistle blowing necessarily nvolves the release of misdemeanor to the public. Thus, whistle-blowing is different from sounding the alarm in the sense that the former releases the information that the public do not know because it has been kept secret, Ie the latter tries to get people alarmed about the facts that are already Known to the public 2. The information is an evidence of wrongdoing on the part of organization: The matters that cause harm to the public interest usually fall under the purview of whistle-blowing. Thus, the matiers that merely influence course of action but are not contrary to the public interest are not commoal¥ treated as “whistle-blowing.”Business Ethics and Corporate Go The individual has carefully analysed the situation to determi nature of the violation, the immediacy of the violation, en Me tious 5. The individual's action is commensurate with res Whistle-Biowing. Listening tothe Inne: Voce an \ t to avoid whistle blowing to take ing to place. It is always better for an organization to De pronctive tan ace ts ar offal wing Bsus, prevertion is better and cheaper than cure One way to be proactive in this regard is to have Ponsibilty for avoiding and/or exposing moral violation. the knowledge about what actually causes whistle blowing in an organization. FEES trees oF weistie-siowina Researchers (Nader al, 172 and Dandekar 1993) have listed the following as the i tsual causes of whistle-blowing in organizations | 1. Misuse of official funds for private purposes. 2. Official powers used for private gain ; | Dependi rho and whom the wi i *Pending on who and whom the wrongdoing is d Renee eos circg mamenlyoa (uuiioe ee ce ©. Internal: When the whistle-blower reports the wron ti w rongdoin, ial higher position in the organization, itis called “inertal witty He this case, the very purpose of whistle is to get the wrongdoings: investiga d = per the procedures of the organization in this regard. The usual ae of internal whistle-blowing are disloyalty, imy i insubordination, disobedience, etc. ope ae © External: Where the wrongdoings are reported to the people outside the organization like media, public interest groups or enforcement agencies, itis called ‘external whistle-blowing’. While some favour outside whistle blowing, others oppose on the ground of morality and loyalty on the part of the employee toward his/her organization. © Alumni: When the whistle-blowing is done by the former employee of the organization, it is called ‘alumni whistle-blowing” # Open: When the identity of the whistle blowers revealed, itis called “open whistle-blowing.” © Anonymous: When the identity of the called ‘anonymous whistle-blowing,” © Personal: Where the organizational wrongdoings aretoha se Sieclosing such wrongdoings is called ‘personal whistle blowing, Though thisis not justified morally, itis desirable only when there is danger to one’s freedom or dignity or esteem. 2 Impersonal: When the wrongdoing is 10 harmothers, itis called “impersonal whistle-blowing.” about wrongdoings or unethical ¢ Government: Where a disclosure is made ; 3 ‘| practices adopted by the officials ofthe ‘Government itis called ‘government ; 3, Discrimination by age, race, or sex. 4. Corruption, 5, Dumping of industrial pollutants causing harm to publi. whistle-blower is not revealed, itis whistle- blowing.” 4 «Corporate: When a disclosure is made about the wrongdoings ina business corporation, it is called ‘corporate whistle-blowing- [EDED causes oF WHISTLE-BLOWING ing wrongdoings of an } istle-blowing by disclosi 1 Be that as it may be, whistleblowing by aot j ‘ nl ‘ype or other to the organizations cnganization to outsiders causes harm of Ne IPCC Tanzi a Fronce, wrhistle-blowing is not welcome. This:required expertise to present our matter effectively. The agent is expected to act ag the principal would himsel{/herself. The agent is paid (be. fee) for the t2k done by him for principal. The main obligation of an agent is to act in the interest of the principal In the similar vein, an employee is also an agent of his/her organtzation/ employer. Therefore, an employee as an agent has an obligation to work for the benefit of his/her employer as per directions by protecting the confidential information. In nutshell, the employee has to work just like a loyal agent: Since whistle-blowing violates the law of agency, ic. loyalty, hence it is condemned Whistle-blowing by violating the law of agency seems to some as disloyalty: .e., “io bite the hand thet feeds one.” Here is a vigorous condemnation of whistle-blowing by James Roche, the former Chairman of the Board of General Motors Corporation: ince critics are now busy croding another support of free enterprises: the loyalty of a management team, with its unifying valued co- operation. Some of the enemies of business now encourage an employee to be disloyal to the enterprise. They want to create suspicion and disharmony and pry into the proprietary interests of the business, This may be whistle-blowing ... but it is another tactic of spreading disunity w=. Whistle-blowing is not courageous and not deserving of gratitude and protection; it is corrosive and impermissible (Roche 1971: 445).” sng 2 ota temperats statement of typlenl condemnation ofcsbisle Baan loo .¢ same lines of Roche comes from Sissela Bok as quoted by Boatright (2003: 107). That a ee ae “Furthermore, the whistle-blower hopes to stop the game, but since he is neither referee nor coach, his act is seen as a violation of loyalty. In holding his position, he has assumed certain obligations to his colleagues and clients. He may even have subscribed to a loyalty oath or a promise of confidentiality. Loyalty to colleagues and clients comes to be pitted against loyalty to the public interest, to those who may be injured unless the revelation is made.” Milton Friedman (1962:133) has made a manager’s obligation to. the stockholders, Le. owners imperiously clear. He says, “In a free-enterprise, private property system, a corporate executive is an employee of the owners of the: business. He has direct responsibility to his employers. That responsibility is to conduct the business in accordance with their desires, which generally will be t® make as much money as possible while confirming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.” 18.4.2 Justifications in Favour of Whistle-Blowing It is important to mention that the supporters of whistle-blowing do se disagree with the law of agency, ie., the obligation of whistle-blower towat i his/her organization. They also admit that the employees have obligation loyalty toward their organization, but the obligation is not without ticnitations The limitation is to obey all reasonable directives of the principal. be- organization. For example, an employee is hired as an agent with a PuIpOSs Ne polices oncomminion. Then. oud be ade ee el ile aan, Pe nnd Mire to wing dogs ln AT Hat he age a or pve ha pancpal eoaure the supe Soong anyiing cl het arpa bowing not someting oe rie plowing ako rain tone tment someting et ca without ade aor sification forwarded in favour of wise Blow MB niche mp ety even re emoleye or ngs Se Ea NE pe apponent of wheeling te $e wines, The activities not only affect the players but everyone appeal to ie rin the moval sphere competion is es Teh understandable « misleading: in the mer on byalty though under tanda ateclowing is not only permssible But expect eae ret ofeisloyalty tothe company, then company i harming society. The issue isnot o Fee any i natlg blower hasan obligation to society and if blowing the whistle will bring retaliation.Business Ethics % Frank Serpico: He i ‘and Corporate Govern Je-Blowing: stenng fo the Inner VOee v1 * He is the legendary e» wanes Whistie- Blowing: ; (NYPD) whose story waste set fa tehccnng en Nee or Uttar Pradesh after the outlet was found committing Pacing ~ both tale? nae MRS OF best sling book, and a im sarang At a oe af fuel Munjunath’s Killing in November 200° * oth titled ‘Serpico.’ When ho became a cop in 196 staringal |r rina large scam of petrol adulteration and protectio: pact ecame a cop in 1960, payoffs, kickbe ne Ee aang oe Sees orn ae en Tempant in NYPD. Refusing to teak the prea feted unearthed gross irregularities being ‘committed in supply of iat the PetPico complained to the Poice Commissioner and the Mayor, butte none | ing stain during spice mspecton in Seem 274 Peommened strict 1971, after wich thecoctae area ee na tee ean ea hafaction against the owner. 1971 after which te cops as wells the criminal started ging forbim Mates penal action ngs Srodkar was a man who, during the Ketan pisibecead Sisto hil Serpce quit NYPD th 1973 Out NYPEO Ny eOoR ga oo 4£ 2001, exposed how the Bombay Stock Exchange's (BSE) high profile President, 0200 pote toe aceasingecraiewemarketinformation from thesurvelliance ee to his help. Serpico quit NYPD in 1972 but NYPD has becomes morehonest | Anand Rat since his time. iA ad F iamadtatalys Dr. Stephen Bolsin: He is a former anesthetist at the U.K’s Bristol Royal Se a ae The BSE fabricated Infirmary (1988-95) who blew the whistle on a large number of unnecessary of dereliction of duty, absenteeism and deaths of children occurring during heart surgeries due to the incompetence of ‘These fabricated charges were les the hospital’s surgeons. Ostracized by other doctors, Dr. Boslin was forced to i ; emigrate to Austealia in 1995. But his disclosure led to enquiries by the General Medical Council and the Government; the department from future practice of two, surgeons and the hospital chief in 1989; and also several far-reaching refdrms in the National Health Service (NHS). It also acted as a catalyst for the enactment of the U.K.'s Public Interest Disclosure Act of 1998. Cynthia Cooper of Worldcom: Sherron Watkins of Enrons who exposed corporate financial scandals, and Coleen Rowley of the FBI who later outlined theagency's slow action prior to the September 11, 2001 attacks. All three women were selected by the Time Magazine as its ‘Persons of the Year 2002.’ All three lost their lives, India has also some exemplary and heroic whistle blowers. Following are such three ones: Satyendra Kumar Dubey: Satyendra Kumar Dubey was a Sl-year-old IT-Kanpur civil engineering graduate working with the National Highways: Authority of India (NHAI) and assigned to former Prime Minister Vajpayee’s pet and ambitious project. the Golden Quadrilateral, to connect the four comers of India. He was posted at Koderma, Jharkhand. On discovering rampant commuption and poor implementation of work in the section where he had been posted, Dubey wrote to the Prime Minister exposing the irregularities. In the letter, received by — the Prime Minister’s Office (PMO) on 11 November, 2002, he had named s¢ companies. Fearing retribution, he had requested that his name be kept But the PMO officials circulated his letter along with details of | among the bureaucracy. The number of notings on the file bears | (The Indian Express, 30 November, 2003). While the file was mak one official thought about the threat Dubey was being exposed t0: the PMO did not heed Dubey’s request for anonymity is not kno a year later, on 27 November, 2003, he was murdered in Gaya, Bitar Shanmugam Manjunath: S. Munjunath, a 27-year-old 1IM-1 working as a sales officer with Indian Oil Corperation (OS for attempting to ensure that people did not get adulterated! reportedly started proceedings against the owner of Mita and made erBusiness Ethics and Corporate Governance | ¥ — cope I] but f ‘Public Interest Disclosure to whistle-blowers was f Terrorism Act (POTA) was mooted. empts a5 we 486 and Exchange Board of India niake legal protection available to the (Protection of Informers) Bill (PIDB)’ to provid mooted at the same ti nthe Prevention © f Both POTA and PIDB were drafted by the same man at the same time. POTA was If for political reasons. Yes, if the enacted, but PIDB went to the usual dusty she : PIDB had been made into law, Satyendra Dubey might still have been alive today. Based on the experiences of other countries, 4 few general principles are suggested to provide protection to whistle-blowers in India. : With the consent of the required number of state governments, Parliament should try to enact a single Act for all employees working in all kinds of organizations. © ‘The Official Secrets Act’ should be overridden to provide for ap yyment OF severance contracts defense and the ‘gagging clauses’ in emplo: shoulld be declared void in respect of public inte t disclosures. e What constitute ‘public interest disclosure ’| learly defined? . ° Sule the genie and ron i ‘must be protected. se caught making anony ou protected rather should be se n ae ai e There should be ‘fast track’ m’ for ad or the lines of the ‘Sarbanes-Oxley Act t ‘ a (SEBI). fndia made att whistie-blowers e protection me whe ublic interest