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This edition first published 2019
© 2019 Kate Kenny, Wim Vandekerckhove, and Marianna Fotaki
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This book is accompanied by a companion website:
www.wiley.com/go/Kenny/whistleblowing-guide
The website includes:
Recent years have seen dramatic and fundamental changes in whistleblower procedures for organizations. Prompted by a spate of important public disclosures, organizations are now mandated by law in various countries to implement effective arrangements enabling employees to speak up about perceived wrongdoing. Yet few resources exist to help with this. To fill the gap, this book examines the opportunities and challenges associated with different types of whistleblowing arrangements (often called speak‐up systems), and makes recommendations based on best practice. Our proposed model for the effective development of sustainable speak‐up systems is rigorously grounded in new, empirical, international research, in a variety of organizational settings along with existing academic literature on the issue.
Whistleblowing forms a key means of addressing dangerous wrongdoing and illegal behaviour in today's organizations. The absence of effective speak‐up arrangements prevents organizations and societies from avoiding major disasters. Attempts to alert the authorities to wrongdoing by internal personnel are currently on the increase. However, in many cases, suffering and retaliation experienced by whistleblowers is exacerbated because few if any procedures are in place to receive and follow up on concerns raised by employees. Even when systems are in place, they are often bypassed, and the whistleblower is silenced or over‐ruled, as was the case in the Deepwater Horizon oil spill, the collapse of Enron, and the nuclear meltdown after the Fukushima earthquake, for example.1 Whistleblowing has become an important issue, both for societies, as well as for organizations.
Speak‐up arrangements can have economic benefits for organizations and society. They also save money both for private and public sector organizations. A recent study of over 5,000 firms shows that 40% of companies surveyed suffered from serious economic crimes that averaged over $3 million each in losses. Whistleblowers exposed 43% of these crimes, which means that whistleblowing was more effective than all the other measures combined: corporate security, internal audits, and law enforcement.2 Workers who voice their concern can help to prevent the dysfunctional behaviour that leads to financial and reputational losses by firms and public sector organizations. Ineffective speak‐up arrangements, however, limit their ability to do this, and ultimately harm the organization as well as the whistleblower.
The question of how to develop effective speak‐up arrangements has become urgent. There is increased media attention for whistleblowers, and policy‐makers across the world have lobbied to pass legislation protecting whistleblowers. Although legislation is essential for encouraging speaking up against wrongdoing, it has also drawn our attention to the missing link—that of the organization and its internal arrangements in place for making disclosures. Hence, implementing effective speak‐up arrangements is now a vital part of reforming corporate governance, public sector accountability, and professional responsibility. With this book, we hope to contribute to the success of these reforms.
Until now, whistleblowing has mainly been researched from the point of view of the whistleblower. Our research is innovative because it provides insights into speaking‐up from the perspective of those who operate the speak‐up arrangements.
This book offers valuable contributions for academic researchers, professional audiences and managers. It is unique because, unlike other studies and guides, it focuses on the context as well as the organization. We find that these aspects, including legislation cultural norms and economic structures, significantly influence the ways in which speak‐up systems are implemented and used ‘on the ground’. Our analytic framing allows us to encompass both this ‘macro’ focus but also a micro‐level examination of how such systems are used in the day‐to‐day activities of those tasked with receiving disclosures.
We find that existing studies of speak‐up arrangements are somewhat limited in that they simplify what are, in reality, complex organizational dynamics. The linear, process‐oriented models proposed by many scholars fail to capture the fact that speak‐up attempts are made in organizational settings in which business‐as‐usual continues, even when operators are trying to deal with disclosures. Real‐life speak‐ups rarely if ever progress in a simple fashion: from disclosure, to remedy, to sanction of the wrongdoer. Our research highlights how attempts to achieve each stage are, in practice, made against a backdrop of organizational norms and structures that can represent obstacles to the successful disclosure and resolution of wrongdoing. Moreover, where substantial attempts to remedy a wrongdoing are poorly managed, this can generate paralysis across the organization as an investigation proceeds.
This book also encompasses rich background detail on three important sectors of the economy, currently under the spotlight in the area of speak‐up systems not least because of recent scandals: financial services, healthcare and engineering. It includes multinational and national perspectives and examples from both public and private sectors.
Through our analysis of practices across a variety of organizational settings, we offer novel and important insights into commonly misunderstood aspects of internal whistleblowing. We show, for example, how a lack of response, or silence, by the person who receives a disclosure, can be misunderstood by the person speaking up. The person can interpret this as a lack of interest in the wrongdoing, or worse, an indication of their impending marginalization by the organization. This situation is not uncommon. Thus, the onus is on the organization to instill and maintain a culture of responsiveness among managers tasked with receiving speak‐ups.
In summary, implementing sustainable speak‐up systems in organizations is more complex and intricate than often thought. It involves an intersection of human, technological and organizational dynamics that impact on each other in many ways, through the introduction and use of such arrangements. Radically new perspectives are needed to understand these aspects and to apply them successfully in our organizations. Our research shows how a speak‐up arrangement can be implemented successfully. This can be done to ensure retaliation against whistleblowers is minimized, while speak‐up operators provide effective and timely feedback to those who raise concerns. Moreover, by showing how speak‐up operators attempt to overcome obstacles, we highlight the vital role trust plays for building a culture of openness and transparency in their organizations.
Through the detailed analysis we provide, our study is unusual in that it distills best‐practice recommendations by combining both empirical analysis and a detailed review of the relevant literature on the topic, a strategy that enables us to develop a unique and valuable framework by which to understand speak‐up arrangements in contemporary organizations.
This book brings together a variety of perspectives to create a model for the development of sustainable speak‐up systems. The key success factors in achieving this are independence, responsiveness, and time. Each of these is explained more fully later in this book.
To enable independence, to enhance responsiveness, and to support speak‐up systems over time, certain contextual features must be present. These are ethical culture and trust.
Ethical culture describes the environment inside an organization that enables and constrains various types of whistleblowing. Kaptein's work in this area for example shows how culture has an impact on how employees speak up, and to whom, whereas Roberts and colleagues show how these dynamics can enhance the success of speak‐up systems. As a result of the analysis developed throughout this book, we add trust to this vital aspect. Trust needs to be created in the organization implementing the systems but it must also be maintained over time. For successful speak‐ups, whistleblowers and speak‐up operators have to make a ‘leap of faith’ and act on uncertain knowledge. Throughout this book we detail strategies for creating this trust, which include empathy with the whistleblower, and providing a choice of interfaces for the whistleblower to choose from. We also detail strategies for maintaining trust including communications regarding investigations that emerge from speak‐ups and the relevant steps, along with operator independence. We describe an important aspect of this framework: the success factors of effective speak‐up and the organizational contextual factors that support these are mutually constitutive—this means that the presence of each supports and reinforces the other. In summary, our model of sustainable speak‐up systems encompasses the importance of independence, responsiveness and time, and of considering how these intertwine with trust and ethical culture.
This book is timely. It is vital to study the ways in which whistleblowing/speak‐up arrangements are deployed in contemporary organizations, today more than ever, for the following reasons:
Industry and sectoral regulators are also increasingly mandating the organizations they regulate to put such measures in place for the internal disclosure of information, and are simultaneously restructuring their own organizations in ways that enable the receipt of information through external disclosures. Internal and external whistleblowing is defined more thoroughly in Chapter 2, but generally refers to disclosing to a member inside the organization or outside the organization respectively. An example comes from the Netherlands; organizations with at least 50 employees are required to have confidential integrity advisors to take disclosures in organizations, although the scope of their role is left intentionally vague,7 and the House of the Whistleblower has been formed to take external disclosures as well.8
From an external perspective, both the FCA and the Care Quality Commission (CQC) in the UK now have dedicated whistleblowing teams registering and following‐up whistleblower concerns raised with them. In the United States, a recent Supreme Court judgement has had the effect that whistleblowers are now required to disclose externally to the Securities and Exchange Commission (SEC) to benefit from the protections under the Dodd‐Frank Wall Street Reform and Consumer Protection Act (Dodd‐Frank) (see Box 1.1). Organizations that wish to encourage internal reporting, then, must have robust disclosure and support systems in place to encourage and facilitate those that wish to speak up. To date, fewer than 30% of organizations have speak‐up systems in place, so significant change will be required. Whistleblower protection legislation is currently being drafted at the EU level, for example, guaranteeing that workers in member states will have a minimum level of protection.9
After reading this book, readers will be able to:
The book benefits from the significant experience of its three authors in the area of whistleblowing research, in the public sector (Vandekerckhove), health and social care (Fotaki), and banking and financial services (Kenny). All authors have significant expertise in researching and writing about the topic of whistleblowing and speaking out: Kate Kenny carried out an in‐depth study into whistleblowing in banking and finance organizations in the UK, Ireland, Switzerland, and the United States, with a focus on compliance and risk officers.21 She has assisted Public Concern at Work (now Protect), the Financial Conduct Authority and Transparency International Ireland on their whistleblowing research and communications. Her publications draw on critical and psychosocial theories to develop new perspectives on whistleblowing.22 Her recent collaborative work focuses on postdisclosure survival strategies of whistleblowers across a variety of sectors. Wim Vandekerckhove was the lead in a qualitative research study on the implementation of whistleblowing arrangements in the NHS for the Freedom to Speak Up Review,23 and carried out research on Belgian public and private sector whistleblowing arrangements for a Transparency International country report on Belgium.24 He has also collaborated with Public Concern at Work (now Protect) on the analysis of 1,000 cases from their whistleblower helpline.25 He has provided expertise to the Council of Europe, the Dutch Whistleblower Authority, and Transparency International on a number of occasions as well. He is currently involved in committees developing a whistleblowing standard with the British Standards Institute and the International Organization for Standardization (ISO). Marianna Fotaki has worked on the role of internal auditors as internal whistleblowers in government agencies in Indonesia, with an internal auditor seconded into the project funded by the World Bank.26 She has also worked as the EU advisor for governments of Russia, Armenia, and Georgia on governance of Social Security, health, and public policy for 10 years in total. Fotaki has been involved in various projects on the impact of introducing market incentives on the quality of healthcare systems in the NHS in England and how the pressure to produce savings by management affects health staff's behaviour leading to widespread patient abuse and the systematic perversion of care.27 More recently, she advised the United Nations Office on Drugs and Crime and helped developing ethics modules for the Education for Justice (E4J) initiative.28 Marianna is a member of the Academic Board of Academy of Business in Society (ABIS) and co‐directs pro‐bono with the Centre for Health and the Public Interest. She is also involved with the European Business Ethics Network (EBEN).
In addition to research focus, each author brings academic expertise:
Vandekerckhove brings expertise in comparative studies of the institutional dimensions of whistleblowing procedures and legislation; Fotaki brings expertise in health with a focus on mental health, psychoanalytic, and psychosocial approaches, along with a specific focus on business ethics and public governance. This complements Kenny's expertise on whistleblowing and organizational culture and identity, with a focus on the banking and finance sector, all of which are essential for the purpose of this project. We have and continue to work with key organizations in this area: the Government Accountability Project (US), Transparency International (Ireland, Belgium and Berlin) and Whistleblowers UK.
Finally we would like to thank Research Assistants Meghan Van Portfliet and Didem Derya Ozdemir for their invaluable help on this project.'
Chapter 2 begins with a discussion of how law‐makers and organizations are increasingly requiring that speak‐up arrangements be implemented, and what implications this has for whistleblowers where there is no encouragement or support for them to speak up, highlighting retaliation as one of the possible consequences. We then consider the existing literature and use it to debunk several myths. We show that whistleblowing is a process and not a one‐off event by presenting data that shows whistleblowers make multiple disclosures to increasingly independent recipients. Additionally, we show that internal and external whistleblowing are not separate occurrences, but are usually part of the same process.
Next, we introduce some theoretical ideas from the literature: we examine the research on employee voice because whistleblowing can be understood as an act of employees using this capacity in their organizations to speak up about wrongdoings. We debunk the traditional myths from several research streams and show how the focus on motivation for speaking up is less important than the fact that it happens in organizations. This act of speaking up has been researched using the concept of fearless speech (parrhesia), which we also examine to describe and highlight the importance of the hearer of speak‐ups. We then link this fearless speech to concepts of trust: between the employee and the organization, and in interpersonal connections. We next examine empirical research that has been carried out in organizations that have implemented speak‐up systems and note some key findings including the importance of an internal champion for the initiative to succeed.
Chapter 3 draws on existing literature and primary research carried out by the authors (which was generously funded by ACCA and ESRC) to present three case studies of whistleblowing in the finance, engineering, and health sectors. A full outline of the study's methods is given in the Appendix. This research is important because there are few empirical studies into this topic.29 The case studies are based on research that was conducted in different organizational and geographical cultural settings. These include (1) implementing speak‐up arrangements at an NHS Trust (UK, public sector); (2) implementing speak‐up arrangements at an engineering multinational firm (UK and multiple continents, private sector); and (3) implementing speak‐up arrangements at a leading retail bank (UK and Ireland, private sector).
The chapter starts with a discussion of the banking sector, illustrating the pervasiveness of a culture of silence that exists in such organizations. Reasons for this silence are identified, which include failure to investigate claims, retaliation against voicing employees and social isolation of voicing employees from colleagues. Next the engineering sector is featured, highlighting the serious consequences that can result from wrongdoing in this area, and the ethical codes that have been implemented. Finally, the healthcare sector is examined with a focus on the NHS in the UK. The issues that have arisen from the decision to run the institution according to market principles are discussed. Case studies are presented for each sector, and key learnings are discussed. To conclude the chapter, parallels and differences in speak‐up mechanisms and culture across sectors are pointed out, and the economic and political context that informs the culture is discussed.
Chapter 4 begins with an overview of Kaptein's research on how culture influences the decision to speak up or not, and then revisits speaking up as a protracted process in more detail, building on the discussion from Chapter 2. Next, we discuss the expectations that are intertwined with speaking up, drawing on Watzlawick's communication theory and Bird's idea of ‘muted conscience’. We then present some of the challenges to operating speak‐up channels, highlighting the concepts of independence, responsiveness and time, and drawing on our own research for examples of these challenges in practice. Following this, we consider some of the barriers to responsiveness and the role trust plays in facilitating responsive behaviour. Finally, we conclude with recommendations on how to use the speak‐up data that is captured when arrangements are in place to help assess the receptiveness of an organization towards employee voice.
The overall aim of the book is to provide a practical guide that is strongly informed by critical interpretation of the relevant research including our own and other academic work. By drawing on various empirical and theoretical frames, we are able to present whistleblowing as a collective endeavour, show the importance of mutual support of employees who wish to speak up, as well as the necessity of fostering a culture of openness and transparency that is conducive to promoting fearless speech. All of these ideas can be used by managers to implement speak‐up arrangements that are effective and protect both whistleblowers and the organization. We begin in Chapter 2 by discussing the importance of speak‐up arrangements.