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REPORT ON WHETHER WHISTLEBLOWERS SHOULD BE REWARDED FOR MAINTAINING SHAREHOLDERS VALUE OR SHOULD BE REVILED FOR THEIR ACT OF DISLOYALTY TO THE CORPORATE MANAGEMENT TEAM IN PARTIAL FULFILMENT OF THE AWARD OF POST-GRADUATE DEGREE (MSC FINANCE AND BUSINESS MANAGEMENT) UNIVERSITY OF BEDFORDSHIRE
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REPORT ON WHETHER WHISTLEBLOWERS SHOULD BE REWARDED FOR MAINTAINING SHAREHOLDERS VALUE OR SHOULD BE REVILED FOR THEIR ACT OF DISLOYALTY TO THE CORPORATE MANAGEMENT TEAM

IN PARTIAL FULFILMENT OF THE AWARD OF POST-GRADUATE DEGREE (MSC FINANCE AND BUSINESS MANAGEMENT)UNIVERSITY OF BEDFORDSHIRE

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ACKNOWLEDGEMENT

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TABLEOFCONTENTS PAGES

ACKNOWLEDGEMENT

TABLE OF CONTENTS

EXECUTIVE SUMMARY

INTRODUCTION

BACKGROUND OF STUDY

STATEMENTS OF PROBLEMS

RESAERCH AIM AND OBJECTIVES

SIGNIFICANCE OF STUDY

RESEARCH METHODOLOGY

LIMITATION TO STUDY

OVERVIEW OF CHAPTERS

LITERATURE REVIEW

INTRODUCTION

HISTORICAL BACKGROUND OF WHISTLEBLOWING

WHAT IS WHISTLEBLOWING

TYPES OF WHISTLEBLOWING

INTERNAL WHISTLEBLOWING

EXTERNAL WHISTLEBLOWING

ALLERGED ORGANISATION MISCONDUCT

AFFECTED PARTIES TO WHISTLEBLOWING

ORGANISATION (CORPORATE MANAGEMENT TEAM)

SHAREHOLDERS & STAKEHOLDERS

INDIVIDUALS (WHSITLEBLOWERS)

POTENTIAL BENEFITS OF WHISTLEBLOWING TO VARIOUS PARTIES

POTENTIAL BENEFITS TO ORGANISATION (CORPORATE MGT TEAM)

POTENTIAL BENEFITS TO SHAREHOLDERS & STAKEHOLDERS

POTENTIAL BENFITS TO INDIVIDUALS (WHISTLEBLOWERS)

POTENTIAL COSTS TO ORGANISATION

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EXECUTIVE SUMMARY

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1. INTRODUTION

1.1 Background of StudyOrganizations often face information that exposes problems or wrongdoing or

represents dissent. Messages signalling problems or wrongdoing frequently

come from internal sources such as employees or from related agencies and

organizations aware of problems or wrongdoing. When the organization refuses

to take appropriate action in response to these messages, insiders or outsiders

may call broader attention to the issue by blowing the whistle. The

communicative process of blowing the whistle is critical for organizations and

societies seeking to monitor areas of emerging risk that are threatening to an

organization’s established routines and assumptions (Jensen, 1987; Miceli &

Near, 1992; Redding, 1985; Seeger 1997).

Over the past 25 years the topic of whistle blowing has been turned around from

being such a rare occurrence, to the present when more numerous cases would

readily flow off the tongue. (Vinten, 1993). This signifies that the concept of

Whistle-blowing cannot be over emphasized. Apart from being an important

aspect of corporate governance, it occurs in all types of organizations and in

response to many kinds of wrongdoing.

Whistle-blowing is often presented as a personal act of conscience that

contributes to the open dissemination of important information about the well-

being of the public (Nader, 1990). Thus, whistleblowing can also be viewed as a

strategy to enhance and maintain quality. It is commonly framed as the ethical

act of a hero, a virtuous individual following a personal sense of right and wrong

at great personal risk, and no doubt, some employers would always hesitate at

the thought of providing rewards for ethical behaviour. In other instances,

however, whistle-blowers are described as turncoats breaking trust and

confidence and lacking in loyalty (Winfield, 1994). Peter Drucker (1982), for

example, argued that encouraging whistle-blowing compromises trust and the

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overall ethical climate of organizations: “Whistle blowing is simply another word

for informing” (p. 234).

1.2 Statement of problemHaving stated earlier that the concept of whistleblowing cannot be

overemphasized, it is pertinent to give a brief definition of what whistle blowing is.

It involves an individual with some level of unique or inside knowledge using

public communication to bring attention to some perceived wrongdoing or

problem, (Johannesen, 1996; Seeger, 1997; Vinten, 1994). Whistleblowing is

seen as a risky business, however most whistleblowers suffer in various ways,

including ostracism, harassment, punitive transfers, reprimands, referral to

psychiatrists and dismissal. It is worthy to note that bosses and top managers are

responsible for many of the attacks on whistleblowers, but coworkers often join in

or do nothing, often due to fear that they could be the next victims.

Several authors and academics have established numerous benefits associated

with whistle blowing. If this being the case, it is however alarming to discover

several ways in which whistle blowers suffer as a result of being loyal. This

research tends to provide an insight into the above mentioned problem by which

investigating ways in which whistle blowers can be rewarded and protected from

the above punitive measures as well as exploring whistle blowing policies in

selected organizations.

1.3 Research Aim and ObjectivesThe aim of this research has its origin from the above mentioned problem. This

research therefore aims to analyse if whistleblowers should be rewarded by

companies as they enhance shareholders valuation, or whether they should be

despised for disloyalty to corporate management team, using UK and USA as my

main area of concentration.

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In order to achieve this aim, the following research objectives would be

examined;

To examine the whole concept concerning whistleblowing

To find out the benefits and costs of whistleblowing to the whistleblowers,

organisations, as well as the stakeholders

To examine the concept of Corporate governance as an important tool in

business ethics

To examine the employees duty of Loyalty and Confidentiality to an

organisation

To examine several laws and regulations protecting whistleblowers in the

UK and in the United States.

To draw a conclusion as to whether whistleblowers should be rewarded or

reviled.

1.4 Significance of StudyWhistleblowing has been viewed from different perception. As a result of this, so

many research studies has been done on corporate governance as regards

ethical issues, morality, illegality especially with regards to whistle blowing in

Canada, UK, USA, Australia and a multitude of many other countries.

Hence, academics have shown an intense concern in identifying the factors

proposed to encourage and improve how whistleblowing can be managed in

organisations. This study is concerned with determining the existing factors that

protect individuals who disclose wrongdoings in organisations, and legal

protection available for those who are willing to blow the whistle, but frightened of

its cost. As a result of these, whistleblowers in organisations need to be protected

especially when they are faced with challenging situations, particularly in the UK

and the USA.

This study will also help improve the practice of whistleblowing management by

eradicating misconducts, and adopting ethical values in UK and USA, which

serves as an indicator of this study.

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However, this research will contribute to existing literature on whistle blowing as it

tries to put to test whistleblowing theories and case studies, with particular

reference to corporate organisation (corporate management team), and also

serve as a base for further research on whistle blowing.

1.5Research MethodologySince the aim of this study is to analyse if whistleblowers should be rewarded or

reviled, for the purpose of this study, secondary data would be used to obtain

information needed, by thoroughly examining what other researchers/scholars

have said and their various judgment .This research method that would be based

on secondary data would be gotten from; Articles and Journals, Published Books,

newspapers, magazine reports and published or unpublished reports.

1.6 Limitation of StudyThe limitation to this study is the fact that the research is restricted to the use of

data from secondary sources only such as journals, textbooks, magazines and

newspapers. The use of primary data would have been more helpful, in that we

would not be restricted to what other researchers have said, but we would have

had the opportunity of ask for others opinion via questionnaire and personal

interviews

1.7 Overview of ChaptersChapter 1 of this study provides a general overview of the entire study. This

includes an introduction and background of whistleblowing; the statement of

problems; research aim and objectives; the significance of the study; methods

that would be used in gathering information needed for the study is also included;

limitation to the study; as well as the overview of chapters.

Chapter 2 deals with the literature review, which looks at relevant theoretical and

empirical work on whistleblowing. This chapter examines the benefits and costs

of blowing the whistle, laws, regulations, policies as regards whistleblowing in the

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UK and USA, such as the PIDA, Sarbanes Oxley, as well as employee’s duty of

loyalty and employer’s ethical duty of good corporate governance.

Chapter 3 provides a review of different case studies of whistleblowing in some

selected corporate organisations in the UK and USA. The context of this chapter

will entail brief background of the company of discuss, the scandal i.e. the

accusation that created the motive for blowing the whistle, and finally the

outcome of the case will be discussed in order to know whether the

whistleblowers in question were rewarded or compensated for blowing the

whistle, or punished, dismissed or victimised as a result of blowing the whistle on

its organisation.

Chapter 4 gives an analysis and discussion of the theories of the reviewed

literature side by side with the selected case studies

Chapter 5 winds up the study by presenting a conclusion based on our findings

between certain case studies on whistleblowing and conceptual research

framework under the study of whether whistleblowers should be rewarded as

they help in improving the valuation of an organisations share, or whether they

should be reviled for their act of disloyalty to their organisation. It also highlights

recommendations are made for future research arising from the study.

WE HAVE TO STATE OUR FOCUS (COY OF FOCUS AND ARE OF

CONCENTATION (SHAREHOLDERS FOR THE PURPOSE OF THIS STUDY)

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2. LITERATURE REVIEW

2.1 IntroductionThe issue of whistle blowing is increasingly becoming a topic of discussion as

employees protest concerns about illegality at work (Vinten 1994). Vinten further

stressed that this issue can have tragic and threatening consequences on the

individual, and also put the company being reported at stake in terms of survival.

It is therefore a problem that will concern not only managers, but students of

business and management as well as workers. According to Miceli and Near

(1994), whistleblowing poses several problems for organisations and its

members who respond to alleged organisational misconduct, thereby, making it

difficult for such organisation to achieve a level organisational decency.

2.2 HISTORICAL BACKGROUND OF WHISTLEBLOWINGWhistleblowing is a new name for an ancient practice from the development of

the theory of individualism. Before Christ in the eighth century, the Hebrew

prophets such as Hosea and Amos did criticise rulers for their social injustices

selflessly, thereby risking their lives (Vinten 1994)

The first recorded usage of “whistleblowing” occurred in 1963 during the famous

Otto Otopeke case. Some documents concerning securities risks in the new

administration was handed over to the Chief Counsel of Senate Subcommittee

on Internal Security by Otopeke. The then Secretary of State Dean Rusk,

dismissed him from his job in the State department for conduct unbecoming a

state department officer. This highly fascinating incident has ever since then

been growing gradually in the media report (Petersen and Farrell, 1986).

In the 60’s employees were at all cost expected to be loyal to their organisations,

thus firing at will any employee who does not comply with the duty of loyalty. This

was as a result of lack of protection for employees who go against this duty of

loyalty to blow the whistle.

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In the 70’s many cases of were experienced as many employees decide to

swallow the whistle despite the awareness of hazardous products. The case of

Firestone in 1972 is a typical example of swallowing the whistle, as warnings of

the producing inferior tires were not adhered to, thus causing may life and some

injuries.

The 1980’s was the beginning of new era for whistleblowers as employees were

provided with protection against whistleblowing so employees could no longer

fire them at their free will. This protection enacted was to protect employees in

the corporate world of America. The wake of Enron and WorldCom, coupled with

Sarbanes-Oxley, was the climax of it all, where employees are now given more

power to report ethical and legal infringement (Ravishankar, 2007)

2.1 What is Whistle blowingAccording to Lewis (2001), there is no universally accepted concept of

whistleblowing but it has been defined by various authors .Some of these

definitions is as follows:

Vinten (1994:5) defined whistleblowing as “the unauthorized disclosure of

information that an employee reasonably believes is evidence of the

contravention of any law, rule, or regulation, code of practice, or professional

statement, or that involves mismanagement, corruption, abuse, of authority, or

danger to public or worker health and safety”. Nader et al (1972) also describes

whistle blowing as an act whereby an individual whose concern for the public

tends to outride that of the organisation he serves and as a result, report any

fraudulent, illegal or harmful doings of an organisation he/she serves to the

public.

Near and Miceli (1985), sees whistleblowing as a situation whereby employees of

an organisation (past/present), reports or leaks a wrongdoing, misconduct i.e.

illegal or illegitimate act, to a person (internal or external) or organisation who is

able to do something or pass judgement. Eaton and Akers (2007) equally share

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the same view with Near and Miceli that whistleblowing is a form of “ethical

informing”, which is motivated by the desire to protect and promote the interest of

the public. Whistleblowing was also defined by Jubb (1999) as the disclosure of

public record, by an employee or person with way into an organisations’

information, about the illegality which implicates the organisation to an external

authority.

Based on a number of definitions of whistleblowing, I will summarise

whistleblowing as been an act whereby an individual decides to report any form

of wrongdoings, misconduct, illegality or activities which can jeopardise the

reputation of an organisation. This act could be reported to internally i.e. within

the organisation, or externally i.e. outside the organisation as long as required

action is taken to correct the act.

In spite of all what has been defined by researchers as whistleblowing, the views

of some are totally different. Researchers of different view of whistleblowing are

classified as anti-whistleblowers.

THE ANTI-WHISTLE BLOWERS

Whistle blowing is not mostly encouraged by everybody. The most distinguished

anti-whistleblower is Peter Drucker (1981). According to him, Whistle blowing

could be viewed as ‘informing’, he also explained further that the societies that

encouraged informers in the Western history were bloody. To him, mutual trust,

and ethics under Whistle blowing should be viewed as impossible. Hoffman and

Moore (1982), criticised Drucker’s judgements and said ‘informing’ is a value-

laden interpretation, not a neutral description of Whistle blowing. To them,

Whistle blowing cannot be expressed as ‘informing’ and that Drucker did not

present a clear argument to support his claims. They further posited that the

support needs rigorous normative reflection and this reflection should be the area

of business ethics.

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An Editorial Survey in Business and Society Review (Orr, 1981), where a group

of leading business and thinkers were invited to comment on Drucker’s article.

According to them, Drucker was generally over simplistic and Monte Throdahl,

senior Vice-President of Monsanto said that his company had made something

good from Whistle blowing especially in respect to safety and environmental

issues.

Westin (1981) considered that Druckers and those who had the mentality as him

(i.e. those that see whistleblowers as rats and whistleblower protection legislation

as rat protection) deserve to be called ‘totalitarian’. These people will only tend to

evaluate silent loyalty to employers i.e. those who act unlawfully or in clear

disregard of public interests, above any moral or social duty, which is meant to be

the otherwise.

ALLERGED ORGANISATION MISCONDUCTSA good number of authors from our definition of Whistle blowing speak about it as

been related to an alleged organisational misconduct. So, an individual must

observe an unpleasant behaviour in an organisation, or position of wrongful

happenings before a form of disclosure can occur or can have effect. After that,

the observations then stand as a starting point for the whistleblower to disclose

misconduct (Miceli and Near, 1992). On the other hand, there must be

verification that the misconduct/ wrongdoing are vital for the individual to disclose

it and speak about (Gundlach, Douglas and Martinko 2003).

TYPES OF WHISTLEBLOWING According to Near and Miceli (1995), there exists two basic form of whistle

blowing. They are;

Internal Whistleblowing External Whistleblowing

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Internal WhistleblowingThis is a situation whereby an individual or employees reports any form of

wrongdoings, or illegality of an organisation to a source within the organisation

that can pass necessary judgment. This type of whistleblowing occurs when the

whistleblower reports wrongdoings to members outside the hierarchy of

command within the company. This may possibly comprise of company’s board

of directors such as executive officers as well as non-executive officers, who are

representatives of company’s shareholders (Finn, 1995). Consequently, reporting

wrongdoings to colleagues cannot be classified as whistleblowing (Kings, 1999).

Barnett (1992) further stated that the issue of internal whistleblowing helps

organisations rectify wrongdoings before it goes public and causing damages to

such company’s reputation as well as its shareholders. Somers and Casal,

(1994), purported that in organisations, internal whistleblowing can be examined

as an expression of trustworthiness and commitment. Therefore, internal whistle

blowing among employees can be encouraged by the introduction of cultural

ethics (Kings 1999).

External Whistle blowing This is a type of whistle blowing whereby a wrongful or illegal act is reported to

sources outside the organisation. Such sources may include reporting to the

media, professional bodies, interest groups, law enforcement agencies, and

many more (Near and Miceli, 1995). When an organisation is without a safe

internal route, whistleblowers are left with no other choice but to disclose the

wrongdoings externally to authorities or more widely. Also, employees tend to

blow the whistle externally when they do not feel safe blowing the whistle within

the organisation. (Dehn, 1999) Most times, external whistleblowing occur when

internal whistleblowing is ignored or when proper action is not taken on the

report. Most often,

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On the other hand, some researchers argue that this type of whistleblowing

brings about negative publicity about an organisation as well as its brand name

and reputation. This negative impact causes shareholders and potential

shareholders loose confident in the organisation. (Barnett, 1992 and Binikos,

2006). Have I actually argued

REVIEW OF PREVIOUS STUDIES

Many researchers have studied the act of whistleblowing from different views.

The following studies were relevant for this study:

David (2005), in his paper made to find out how management should respond to

whistleblowers argue that most employees who notice wrongdoings refuse to

disclose it to management because of the fact that they might get punished for

speaking out. As a result of this, there could be mistrust in the management of an

organisation. He finally concluded that employees should be rewarded for the

courage they have in blowing the whistle as it will serve as a good signal to other

employees that it is safe to disclose unethical behaviour.

Dr Romulo (2004) discussed shareholders awareness, attitudes and concerns

regarding whistleblowing. According to him, whistleblowing can be seen as anti-

corruption measure. For the purpose of his research, 50m stakeholders were

interviewed over the issue of whether whistleblowers should be rewarded or not.

Findings of his study indicated that whistleblowers should be given financial

incentives which will serve as form of motivator for potential whistleblowers.

Some whistleblowers should not be rewarded as it is their responsibility as it

should be seen as part of their job.

Dr Romulo concluded that whistleblowers should be rewarded in terms of

monetary reward, but potential whistleblowers should not take advantage of this

reward and start making living out of whistleblowing.

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Thompson, (1987), in his study described whistleblower as ’’concerned

employee’’. The word concern is an affirmation that the employee has the interest

of the organisation at heart. However, he stated that whistleblowers are seen

from a negative perspective, as they are usually well thought of as rebellious

employees, thus at the end of their actions, they are mostly dismissed, poorly

evaluated by their employers.

All the above studies provide a concrete support and also give an idea on the

subject of whether Whistleblowers as been rewarded for their action or otherwise.

On basis of these researches done by different researchers, a methodology has

been developed for this research.

AFFECTED PARTIES TO WHISTLE BLOWING IN ORGANISTAIONWHISTLEBLOWERThe Whistleblower is a concerned citizen, who is totally inspired by the public

interest, and opened to disclosing a significant wrongdoing to a person capable

of investigating and facilitating correction of such wrongdoing (Senate Select

Committee on Public Interest Whistle blowing 1994). Such disclosure could be

done within a source in an organisation or outside the organisation.

Vickers (1995) explains two types of whistleblower; the ‘watchdog’ and ‘protest’

whistleblowers. Vickers describes a ‘watchdog’ whistleblower as a person or an

employee who discovers any form of illegality or wrongdoing, then exposes it so

as to aid financial disaster or safety, and a ‘protest’ whistleblower as a person

who tends to be mostly concerned about the effects of their employer’s activities.

SHAREHOLDERS & STAKEHOLDERSThe strategic objective of any organisation is to maximise shareholders’ wealth

as well as that of stakeholders such as employees, customers, tax authorities,

and the communities where firms operate. This simply means that mangers

should create as much wealth as possible for the shareholders, and focus on

their stakeholders too. The shareholders wealth can be maximised through the

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cash received as dividend and capital gains arising from increasing share prices

(Head and Watson 2004)

Therefore, firms that focus on their shareholders and stakeholders would mostly

avoid actions that could be harmful to them (Megginson and Smart 2006).

Maximisation of Shareholders Value (DO I NEED TO TALK ON THIS)

CORPORATE MANAGEMENT TEAMManagement is an integral part of, and fundamental to, the successful operations

of the organisation. Management is therefore the cornerstone of organisational

effectiveness, effectiveness, and is concerned with activities for carrying out

organisational processes and the execution work. There are many aspects to

management in work organisations, but the one essential ingredient of any

successful manager is the ability to handle people effectively. (Mullins 2005)

POTENTIAL BENEFITS OF WHISTLE BLOWING TO VARIOUS PARTIESWhistleblowing tends to be beneficial to various parties. Some prominent authors

such as (Graham, 1983; Mathews, 1988; Parmerlee, et al.1982) purported that

whistleblowers can benefits organisations, individuals as well as shareholders by

suggesting solutions to organisational problems. These benefits could be short-

term or long-term (Near and Miceli 1992). Therefore, below are some benefits of

Whistle blowing.

POTENTIAL BENEFIT TO ORGANISATIONS (CORPORATE MANAGEMENT TEAM)

Whistleblowing can be of great benefits to corporate management team as it

facilitates;

Maintenance of Goodwill and Avoidance of Damage Claim;Individuals and Public may decide not to purchase certain goods & services as

soon as they realise any form of wrongdoings, thereby putting the market of such

organisation at a disadvantage over other companies with related products and

services. In order words, when attention is given to wrongdoings reported within

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an organisation, it will help protect the good name of the organisation and avoid

any form of damage claim.

However, some argue that outsiders hear of wrongdoings, this is because of the

fact that the whistles are blown outside. But according to Baker (1983), whistles

are blown outside when not given proper attention to inside.

Support for Codes of Ethics A research by Mathews (1987:125) stated that there existed “little relationship

between codes of conduct, civil, and administrative corporate violations, contrary

to the notion that the codes serves as an effective form of regulation”. Hence,

Whistle blowing helps management of organisations who responds to it make

necessary changes which goes in line with organisational codes of ethics (Near

and Miceli 1992).

Improved Employee MoralThose who blow the whistle tend to feel more fulfilled ad satisfied than those who

keep silent to wrong doings. Therefore, accomplished Whistle blowing gives

employees more confidence that they are able to change unethical behaviour in

organisations, thereby improving employees’ satisfaction at work (Near and

Miceli 1988a).

Avoidance of Legal RegulationOrganisations trapped in illegal activities are mostly subject to punishment by

legal authorities. Such punishments are mostly borne by investors and mangers

of such corporate illegality (Davidson & Worrell, 1988). Punishments for

wrongdoings or illegality can only be minimised or avoided when the

organisations involved yields to internal Whistle blowing and corrects it before the

public learns of the organisations wrongdoings. Also, correction of internal

Whistle blowing protects the organisation from been constantly monitored by

legislators, which could lead to the introduction of new regulations of

organisations activities (Near and Miceli, 1992)

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POTENTIAL BENEFIT TO INDIVIDUAL (WHISTLEBLOWER)Whistleblowers according to Cherry (2004), are regarded as “Lone voices of

reason, morality and truth who speak out to protect the public from harm”. Hence,

benefits of blowing the whistle are that;

The whistleblower would be legally protected from retaliation as he/she

places the interest of the public more importantly than that of his

employers.

They usually receive several awards for their loyalty as well as public

recognition.

POTENTIAL BENEFITS TO SHAREHOLDERS & STAKEHOLDERSShareholders are regarded as those individuals who provide fund for ongoing of

an organisation. They are usually regarded as legal owners of businesses who

are interested in how their money is been invested so they can have returns in

form of cash dividend and capital gains and stakeholders comprise of employees,

consumers and the general pubic. Workers usually pay more attention to their job

security, pay as well as health and safety policy put in place at work. Consumers

are particular about the quality of goods & services consumed, thus, making the

public/community interested in the social and environmental impact organisations

have on the community. As a result of all these, when making corporate

decisions, each of these groups needs to be well thought of, since they have got

a “stake” in the organisation (Lewis 2001).

As a result of these, Whistle blowing helps shareholders & stakeholders to;

Increase their Safety and Well-being;Whistle blowing adhered to or corrected tends to save a company from huge

potential loss which could harm stakeholders especially (investors and potential

investors) of an organisation from huge financial loss, since weak financial

performance will damage shareholders interest (Lewis 2001). Thereby, enabling

stakeholders, especially shareholders and potential investors feel save in

investing their monies in such company.

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Subsequently, the criminal Justice Commission (1999) also provides some long-

term benefits of Whistle blowing to Shareholders & stakeholders. Therefore, the

act of Whistle blowing;

A.) Helps protect stakeholders from corporate negative reputation.

B.)Helps managers and staffs to focus on accountability, as a result to their

accountability to shareholders

C.)Helps improve company’s performance, which could lead to increase in cash

dividend and capital gains.

D.)Helps protect employees, consumers and the public from the danger of health

and safety

Notwithstanding all the stated benefits of whistleblowing to various parties above,

some researchers claim that the cost of whistleblowing outweighs its benefits.

Some of these costs are unbearable. Many whistleblowers tend to receive a lot of

negative response from organisations, families and many more. Shareholders

are not let out of the threat of whistleblowing as most times they suffer a lot of

financial distress as a result of whistleblowing. Below are some costs of

whistleblowing to various parties.

POTENTIAL COSTS TO ORGANISATIONS

Some of the costs of whistleblowing to an organisation are;

Threats to Organisational Viability;Whistleblowers serve as a form of threat to organisations as it may be seen as

destructive instrument to the profitability of an organisation. Near and Miceli

(1992) further believe it could be cost effective to break the law may enable

organisations minimise costs and pay less for breaking such laws.

Challenge to Authority Structure;Weinstein (1987) posited that whistleblowers may serve as a threat to an

organisations authority structure, as a result of its difficulty to the organisation.

This can also lead to deterioration of an organisations chain of command.

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Unpredictability of Organisation Member Actions;The issue of Whistle blowing gives some organisations much concern as to

which employee would blow the whistle and an unwarranted report may cause a

disruption with one’s professional activities (Koshland, 1988). For example, fear

of a student by faculty members raising issues on an undue grading.

POTENTIAL COSTS TO INDIVIDUAL (WHISTLEBLOWER)

According to Soeken and Soekan (1987), Estell (2002) and Daniels (2002),

Consequences of individuals who blow the whistle includes;

Been ostracised and abused by other colleagues at works

Threats to his/her family members i.e. security of his/her family members

are mostly at risk

Such individuals attempts suicides in order to escape living in nightmare.

Other consequences for the whistleblowers are;

a.) Whistleblowers, in their quest for compensation to damages suffered,

they tend to undergo continual litigation (Jos, Tompkins and Hays 1989)

b.) They usually go through terrible financial crisis as a result of lost job and

their prospect for another job is being jeopardized as a result of the person’s

reputation as a traitor (Uys 2005)

POTENTIAL COSTS TO SHAREHOLDERS & STAKEHOLDERS

Whistle blowing could have both long-term and shot-term consequences on

shareholders as well as stakeholders, depending on the extent of the

misconduct. Most times, shareholders loose their investments in terms cash

dividend and capital gains, while employees job security would be at stake, the

environment could be threatened, and the consumers’ health and safety could be

jeopardized.

However, Bowen and Raigopal (2007) argued that Whistle blowing made known

in an organisation usually leads to the downward movement, of the market’s

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share price, particularly if the allegation has to do with earning reinstatement or

manoeuvring of profit.

Despite all the benefits and costs of blowing the whistle explained above, some

whistleblowers may decide to keep silent rather than blow the whistle due to

some benefits. Some benefits of keeping silent are discussed below; BENEFITS OF NOT BLOWING THE WHISTLEWhistleblowers act in order to stop or correct a wrongdoings or misconducts

(Near and Miceli 1985). Therefore, keeping silent to wrongdoings can have both

negative implications and positive implications on the organisations, the

individual (whistleblower), as well as the stakeholder and shareholders such as

employees, consumers and the public, depending on the magnitude of the

misconduct. Some benefits of not blowing the whistle are briefly explained below.

BENEFITS TO ORGANISATIONAs a result of staying silent to wrongdoing, managers of organisations may tend

to correct any form of illegality or wrongdoings on time. The option of keeping

silent may also give room for smooth organisational functioning, as well as

avoidance of unserious complaints such as lawsuits (Near and Miceli 1992).

However,

BENEFITS TO SHAREHOLDERS & STAKEHOLDERSThe option of staying silent may benefit stakeholders as managers of

organisations are persuade from making decisions which are less risky to

stakeholders. Some managers may become more careful in their decision

making as a result of the fear that possible whistleblowers may analysis their

actions as illegitimate. Also, another benefit to stakeholders is that when the

whistle is not blown, cost associated to unserious allegations by whistleblowers

are prevented. Such cost includes fees to file a legal action or court injunction.

(Near and Miceli, 1989).

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BENEFITS TO INDIVIDUAL (WHISTLEBLOWER)Silence is an option of least risk for individual employee who comes across

wrongdoings in the workplace (Callend and Dehn 2004). Employees mostly keep

quite to wrong doings at the detriment of stakeholders though, but to their own

benefit. Such attitude of keeping silent to wrongdoings saves the individual from

demotion, harassment at work as well as been ostracised by colleagues.

COSTS OF NOT BLOWING THE WHISTLEBlackburn (1988, p9), indicated that “staying silent has negative implications for

the organisation”. Also, Staying silent has negative implication on whistleblowers

(individual) as well as Shareholders and stakeholders. Some costs of keeping

silent are examined below

COST TO THE ORGANISATIONEmployees who are aware of any illegality in the company and decide to keep

quiet, tends to loose focus at work and pays little or no attention to their job,

thereby leading to ineffectiveness at workplace.

After a while, managers of organisations that execute illegal act encounter more

problems. Such problem is likely to keep occurring, and in so doing

organisational survival is put at stake (Baucus and Near, 1991)

COST TO SHAREHOLDERS AND STAKEHOLDERSShareholders as well as stakeholders have got different stakes in organisations.

As a result of these stakes, they suffer losses when an employee decides to keep

quite.

The cost of keeping quite about wrongdoings is that shareholders loss all their

investment when the company eventually folds up, and the stakeholders such

employees suffer unemployment; consumers at times loose their lives as a

results of consumption of products harmful.

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PROBLEMS OF WHISTLE BLOWINGSome problems of Whistle blowing as stated by Westin (1981) as follows:

I. The problems of ineffectual performing employees are likely to blow the

whistle in order to keep away from been sanctioned.

II. The issues some whistleblowers are protesting about are not the

unlawful /wrongdoings activities, but social policies by management that

employees sees as foolish.

III. The unclear of legal definitions of what comprises of a safe products,

unacceptable treatments of employees or products dangerous to health.

IV. Employees who blow the whistle can be chosen in some ways that would

be unacceptably disturbing, in spite of the merits of their complaints.

ORGANISATIONAL RESPONSES TO WHISTLE BLOWINGDifferent authors such as Barnett (1992:949) and Ponemon (1994:119) purported

that organisations response to whistle blowing in different ways.

The following organisation response towards Whistle blowing has been

described by (Baker and Dawood 2004: 134-135) as;

The credibility of the whistleblower might be challenged by the

organisation and hence can reduce the attention received from the public

The unlawful activity can be acknowledged, and the whistleblower

rewarded for his good conduct.

The whistleblower can be isolated from other employees so as to avoid

the flow of information.

A specific individual might be selected to classify who is responsible for

what, and also to receive complaints on wrongdoings.

The organisation can respond to whistle blowing by punishing the

whistleblower as an example to other potential whistleblower.

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This was argued by Near and Miceli (1985) who refers organisational response

towards Whistle blowing as it were like an incorporated and consistent response

to the whistleblower by all members of an organisation. But in a further research

by Miceli and Near (1992) they concluded that most whistleblowers encounter

diverse responses within their organisations. These responses could be a shot-

term response or long-term response summarised in the diagram below

Short-Term and Long-Term Responses/Outcomes of Whistle blowing Short –Term Long-Term

FIGURE 1 SOURCE: Adapted from Miceli and Near, (1992)

ETHICAL ISSUES IN BUSINESS

Over the last decades, business ethics has become an accepted part of

management both inside and outside organisations. Just like marketers claim

that everything follows from marketing or like numbers would be meaningless

without accounts in organisations, so do business ethicists claim that the values

and purposes matters above all else (Jones et al.2005). Nevertheless, as the

Termination of wrongdoing

Continuation of wrongdoing

Retaliation against whistleblowers

Reward to whistleblower

No response to Whistleblower

Whistleblowingg

Policy change

No Policy change

Negative organisational outcomes

Positives organisational outcomes

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existence of wrongdoing is more evident that organisation committed to ethical

behaviours pays-off. Consequently, in today’s post-Enron, management

accountants as well as financial managers are expected to lay emphasis on

actions that would promote ethical actions that would preserve assets and

improve profits as a form of good return for shareholders (Verschoor 2003)

Hence, employees owe to their organisation duty of loyalty and confidentiality,

and from the management, a good ethics of corporate governance is expected of

them.

Ethical duty of Loyalty and Confidentiality In the last decades, due to difficulty of loyalty and confidentiality has, the issue of

whether loyalty or confidentiality as a good quality of an employee or as a wicked

behaviour is still been debated on by many researchers (Hart and Thompson,

2007).

Vallance (1995) stated that it is difficult to set up arrangements whereby board of

directors and shareholders make sure that the aim of an organisation is pursed

and achieved at all cost. However, this cannot be achieved without the

employees who are usually in the best position to see and know what is going on

in the organisation. Now, what if employees see things which are which they

believe to be wrong in the company they operate, what should they do? These

and many more are some of the dilemmas of Whistle blowing where an individual

is faced with the conflict of loyalty and confidentiality. Naturally, employees are

taken to owe a duty of loyalty and confidentiality to the business which employs

them, but do employees have a duty of loyalty to the organisation irrespective of

how the company function?

According to Bok (1980) whistleblowers are disloyal employees, as he/she must

have sworn certain oat of loyalty and confidentiality to his colleagues and clients.

Bowie (2002), in support of Bok claims that Having sworn to silence which should

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be a doubtless obligation, an employees’ duty of loyalty will likely restrict him/her

from reporting his employer’s or organization.

Vallance (1995) argues that; employees do not really have a duty of loyalty and

confidentiality. If something illegal is going on in the organisation, there is no duty

of confidentiality and loyalty, and no business can, by embedded or explicit

means, irrespective of the situation tie its employees to silence. Vallance further

stated that where an employee does have a loyalty to the business is in making

sure that the aim of the business is well achieved, but the aim will almost

certainly not be served by wrongdoing.

Furthermore, Tittle (2002), examines why duty of loyalty can be overridden. The

promise of loyalty can be overridden if;

A.)The public interest at issue is strong enough

B.)The oat of loyalty was taken through deceit or force

C.)The duty of loyalty is in itself wrong or unlawful

The fact that one has sworn to loyalty, should not serve as a reason for an

involvement in covering up crime or a breach of public trust.

Therefore, the issue of being loyal is protecting the things that allow the business

to achieve shareholder value over the long-term, in terms of its reputation, brand

protection, the concern for its product as well as customers of such product

(Vallance 1995).

WHISTLE BLOWING ANDTHE ISSUE OF CORPORATE GOVERNANCEWhistle blowing is an important aspect of corporate governance. This was made

clear in the high cases of scandals of Enron (2001), when sherron Watkins blew

the whistle on Enron in US, and when Harry Templeton confronted his boss; the

case well described as “the Maxwell Saga” (1991) in the UK and many more. All

these failures and scandals were as a result of deficiency in the organisations

corporate governance.

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Several practices are being established daily on corporate governance. Such

practices are the increase adoption of corporate whistleblower policies. Due to

the adoption of these practices and policies, a clear commitment of ethical

responsibilities are been asked to be exhibited by directors of different

businesses. Also, for the purpose of improved performance, key staffs are also

held liable for any unlawful actions and are asked to act responsibly (Olander,

2004 and Fels, 2003).

As a result of several corporate scandals such as the falsified accounting

policies, governments and regulators have decided to introduce stronger

regulations in order to bring back the investors i.e. shareholders assurance in the

financial market and also stop future collapses as a result of scandals. In different

countries, the issue of corporate governance laws/rules has been properly

adjusted and developed. These laws include; Sarbanes- Oxley- USA, Cadbury

Report- UK, OCED principles of corporate governance and the NYSE listing

standards.

The OCED Principles of Corporate GovernanceThe OECD’s (Organisation for Economic Corporation Development) developed

some principles of corporate Governance that focuses on private sector (1999).

This principles is to assist both OCED and non-OCED governments in their

attempt to appraise and improve the regulatory framework of corporate

governance. These principles were first published in 1999, and were revised in

April 2004. The principles are to;

I. Provide form of relationship between a company’s’ management, its board,

its shareholders as well as other stakeholders of the organisation.

II. Provide a well structured set of company’s objectives, the way of achieving

the stated objectives, and determining how the performance is being

monitored.

III. Ensure a proper monitoring of management, strategic leadership of the

organisation by the board, as well as the boards accountabilities to its

various stakeholders.

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In conclusion, from all the above explanation, developing a good corporate

governance structure will enable mangers behave ethically and make decisions

that profit the shareholders, as well as expose an organisation to several kinds of

risks, which will enable them to maintain an optimal risk-return and therefore

maximize shareholders’ value.

RELEVANT LEGISLATURE REGARDING WHISTLE BLOWING LEGAL PROTECTION FOR WHISTLEBLOWERS

IntroductionLegal protection for employees who blow the whistle is a relatively recent

phenomenon. In the nineteenth century, when there was a policy of non

interference by the government, employers benefited from the fact that there was

no job protection. As a result of this, they had the authority to layoff employees as

long as the employees were not employed for an indefinite period, of which,

whistleblowers were not free from this rule.

In the 70’s, things began to change, when the legal protection for whistleblowers

was slowly developed. In recent times, this legal protection has focused mainly

on retaliation suffered by most whistleblowers as both the federal and state

model are intended to protect employees from retaliation, or compensate them, if

they have by any way suffered retaliation, but it was not adequately effected

(Near and Miceli 1992).

Therefore, in order to encourage Whistle blowing and compensate the individuals

concerned for the risk they are prepared undertake in the UK the US, several

acts, rules, and models has be developed. Some of which are briefly explained

below.

THE US LEGISLATIVE HISTORY /EXPEREIENCEWhistle blowing is not an entirely new issue in the USA, especially in America.

While in the UK, there is yet to be a well detailed law passed dealing with Whistle

blowing across the board, in the USA, a body governing Whistle blowing is not a

new experience entirely (Vinten, 1994)

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The issue of Whistle blowing originally emerged in the federal governments’

False Claims Act and did not from the connection with malfeasance (Miceli and

Near, 1992)

The False Claims Act’s influence.The Act was passed as long ago as 1863 to curb fraud during the US Civil war,

by Abraham Lincoln. His aim was to end the transaction of gunpowder. The

establishment of the false claims acts was to offer a form of motivation to

individuals who give information about an organisation or individual, taking

advantage of the government or cheat the government.

In 1986, antiretaliation protection was added to the act, and the act also spelt out

that 30% from the lawsuits earnings from Whistle blowing case can be shared in,

by the whistleblowers. As a result of this monetary reward, some whistleblowers

can choose to report false claims. Therefore, the act imposes financial penalties

on whistleblowers that make false (Eaton and Akers 2007)

The National Labour Relations Act of 1935 (NLRA)The National Labour Relations Act of 1935 (NLRA) was the first legislation which

guards the whistleblowers. Due to the fact that protection against union related

Whistle blowing by employers was not curtailed, the Federal Whistleblower

Protection Model was enacted, which is commonly known as the National Labour

Relations Act (NDRA) in order to guide employees involved in union-related

activities and who files charges against illegal labour practices. The only problem

with this act is that employees who blow the whistle in regions not covered by the

act are not protected (Near and Miceli 1992)

1989 and 1994: The Whistleblower Protection Act.This Whistle blowing Protection Act was passed in 1989 and amended in 1994.

The purpose of this Act is to protect from retaliation, federal employees at

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workplace who engage in disclosing any wrongdoings, and later amendments is

applicable to strengthen the existing protections to federal employees.

This act has been carefully thought of, by the congress to help reinstate the act

as well as improve protection for federal employees who leak any deceitful

activity which could be of help to the shareholders and the public. The

whistleblower law was agreed upon by the house of representative in 2007, as a

result of their debate (Eaton and Akers 2007).

2002: SOX requirements he changes in the approach towards Whistle blowing, has brought about the

changes in laws and rights associated to whistle blowing. There have been some

examples given by SOX as to how most publicly traded companies has been

asked to restructure their activities and approach towards crime at workplace.

Further on Whistle blowing guidance are sections 806, 301, and 1107 of SOX

Section 806 explains additional protection to those employees who leaks

malpractices to any law enforcement agencies, or any persons of higher

hierarchy to the employee. Those protected by these laws are members of the

publicly traded companies. The regulation states that there is a protection from

retaliation by management or contractor, for any whistleblower that helps in

reporting any breach of federal law or investigation of any deceitful activity that is

not in favour of the company’s shareholders.

However, the regulation further states that if the whistleblower, during the course

of investigating any form of violation against the federal law or violation against

SEC laws experiences retaliation, he/she will be allowed compensation for

damages, litigation costs, attorney fees, reinstatement of proper position.

Necessary support is also made available to such employee to make him/her

complete (Olander, 2004)

Section 301 This section amends the Securities Exchange Act of 1934. The

section compels the audit committee to take a responsibility in Whistle blowing as

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well as reducing corporate fraud. The audit committee is expected to develop a

device which could be used for recording, tracking, and acting on any form of

information provided anonymously or confidentially by an employee.

Therefore, the SOX standards is more than just encouraging companies to be

more alert to whistleblowers by making mandatory various policies and protection

for reporting wrongdoings.

Section1107. In this section, whistleblower’s policy goes further than the

protection of public corporation, but also extends protection to those individuals,

corporative that report to a law enforcement officer any activity that infringes the

federal law. These individuals are been protected from retaliation by the offender

while acting in good faith, and any company, employers that commits this crime

of retaliation, is liable to 10 years imprisonment. Sarbanes-Oxley further stated

that, the audit committee of public companies, as well as securities listed on the

stock exchange are the only ones obligatory to set up procedures for handling

whistleblowers complaints.

Shortcomings of SOX in Whistle blowingSince the endorsements of Sarbanes-Oxley 2002, there have been many debate

and has been challenged on several grounds. SOX have been debated on as

been unconstitutional and too costly especially for small business and foreign

companies. It has also been blamed in part for reduced foreign listing on the New

York Stock Exchange. (Dworkin, 2007).

Dworkin (2007) further sated that the ineffectiveness of SOX was borne by

statistics in the study by Earle and Madek confirmed in their study that through

May 2007, about 677 complaints where done on Sarbanes-Oxley, out of which

499 were dismissed, 95 withdrawn and only 6 of the 286 cases that went to

administrative law judge resulted in a positive decision for the whistleblower. This

made Dworkin (2007) concluded that SOX has been unsuccessful and ineffective

in encourage Whistle blowing.

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THE UK LEGISLATIVE HISTORY/ EXPERIENCEThe British approach to Whistle blowing –focusing on organisational and

individual responsibility has demonstrated a huge success than what could have

been envisaged decades ago by any of its original campaigners.

By the early 1990’s, public’s confidence in many of the institutions and

companies had been shaken by series of disasters and calamity. In July 1991,

the collapse of the Bank of Credit and Commerce International (BACCI) was

investigated and over £2 billion worth of fraud that had dodged exposure for 19

years was uncovered. This case and many more prompted public inquiries to

uncover what went wrong and learn lessons for the future. As a result of these

inquires, it was discovered that in most cases employees knew about the crisis,

but most were frightened to speak while some turned blind eyes to the crisis.

After all these, acts where developed in the UK, such as the Public Concern at

Work (PCaW)- the charity behind much of the work done on Whistle blowing in

the UK, and the Public Interest Disclosure Act (PIDA), also known as

“whistleblower charter”.

The PCaW and the PIDA, would be examined further in this study

Public Concern at Work Public Concern at Work was launched in 1993 “to tackle Whistle blowing”. One of

those behind this new organisation is its present director, Guy Dehn, who had

strong legal, consumer protection and policy backgrounds.

The aim of this independent charity is to respond to the outcry of disasters,

frauds and scandals that could have been avoided if the legitimate concerns of

employees are been heeded to. The goal is to give employees confidence to

raise concerns at work place without fear and also to encourage employers to

listen to them with the intention of supporting them.

The foremost response of this independent charity is to set up a confidential legal

helpline to give employees/individuals with concerns advice about malpractices,

risks or danger at work. Fundamental to making Whistle blowing work and vital to

the charity’s responsibility is;

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A.) To provide free and confidential help to people who are insecure about

whether to raise a concern about wrongdoing;

B.) To train and support organisations on Whistle blowing and accountability

in the modern workplace;

C.) To educate the public, about safer alternatives to keeping silent; and

D.) To effect good management, governance and regulation.

THE PUBLIC DISCLOSURE INTEREST ACT (PIDA) 1998

The Public Interest Disclosure Act (1998) commonly known as the “Whistle

blowing Act” which came into existence as result of the amended Employment

Right Act of 1996, was introduced as a private member’s bill, and was also

endorsed in the commons by the conservative MP Richard Shepherd. This act

was established in order to give support to whistle blowing across the private,

public and voluntary sectors. The acts also protects from unfavourable action or

victimisation from their employers if, the whistle is blown in the interest of the

public. Ref

OVERVIEW OF THE PROVISIONS

MALPRACTICES

In order to be protected, the act applies to employee’s that raises authentic

concern on information about the following categories; a criminal offence, a

failure to comply with any legal; obligation, a miscarriage of justice, danger the

health and safety of any individual, environmental damage, and the concealment

of deliberate information of any of these matter.

INDIVIDUAL COVERED

Asides the employees covered, the act also covers workers, co-workers,

trainees, home workers, police officers, and every professional in NHS.

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GOOD FAITH

In order to be protected, disclosure must be made in good faith. This appears in

ss 43e -43h. Basically this means that a concern can be properly addressed if

made honestly. Therefore, a required disclosure must;

Be made honestly, even where it is made casually or without due care;

Not be for personal gain; and

Must be made in reasonable belief that the disclosure and any other claim

is true

A disclosure in good faith can be rendered invalid for some other main unsuitable

motives.

The issue of whistleblower’s motive: Goode (2002), argue that the motive of the

whistleblower ought to be related to the result as to whether or not to investigate

the matter, suggesting that an investigation into motive will prevent making a

disclosure in bad faith. Fels (2003) further stated that the motive of the

whistleblower is sometimes crucial for assessing reliability, in order to have an

effective plan.

VICTIMISATION AND DISMISSAL

When the act is violated by the dismissal or victimisation of the whistleblower, the

employee can file a claim to an employment tribunal for compensation. An

employee can also be compensated for injury to feeling when victimised (but not

dismissed) and when dismissed/sacked can within seven days seek interim relief

so that his employment continues until the full hearing.

EXCEPTIONALLY SERIOUS MATTERS

If an exceptionally serious matter is reasonable and meets the test for regulatory

disclosures, it will be protected in as much as such disclosure is not made for

personal gain.

GAGGING CLAUSE

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Gagging clause in employment contracts and severance agreement are null and

void as long as they conflict with the acts protection.

SHORTCOMINGS OF PIDAThe PIDA has been said to be imperfect and very complex. Some of the

weaknesses of the PIDA as outlined by De Maria (2002) are as follows;

The exclusion of non-employees and security personnel

The omission of trade unions as a prescribed disclosure channel;

Its limited disclosure routes and the lack of provision for the influence of a

culture of secrecy, and its promotion as well as its implementation.

According to some researchers, out of 1,200 employees who have lodged

complaints on victimisation, over half were unsuccessful. This also concerns the

PCaW. Therefore, we can conclude that the success of PIDA is minimal.

CONDITIONS FOR JUSTIFYING A WHISTLE BLOWING ACT

Hunt (1997) claimed that the criteria for justifying a Whistle blowing act revolve

around some issues such as the disclosure, the reason for it, and the motives

which lie behind it. At times, Whistle blowing is justified and at times not justified.

But where firm minimal conditions are met, it would be sensible to claim that

Whistle blowing be justified .A justified disclosure according to Bowie(1982), is

one which;

The act whistleblowing must be suitable ethical motives for avoiding

unnecessary harm to others;

The whistleblower must have exhausted all the internal measures for

correcting the perceived misconduct, before opting for public disclosure;

The whistleblower must perceive that the violations or misconduct will be

of serious danger;

The action of the whistleblower must be in line with his or her

responsibilities designed to expose or avoid any breach of ethics;

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The actions of the whistleblower must have some sensible likelihood of

success.

Davis (1996) argues that justifying whistleblowers act is irrelevant except the act

is been thought, as wrong. Also we do not have to justify the act of

whistleblowing because as far as the act is wrong, justification is impractical. He

further argues that the act of blowing the whistle does not prevent much harm,

therefore, if whistleblowers must have good reasons to believe that revealing the

threat will probably prevent harm, then the history of whistleblowing virtually rules

out at the moral justification of whistleblowing.

3. CASE STUDIES

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3.1IntroductionThis section gives a summary on true life cases on the whistleblower as well as

the response of the organisation to the disclosure.

For the purpose of this study, four true life cases on Whistle blowing in the UK

and the USA would be examined. This includes cases between;

3.2 NETCOM CONSULTANTS (UK) VS FERNADES (2000)

3.2.1 The Company Netcom Consultants was started operations in 1993, and it has business in

Sweden, Singapore, and also throughout Asia and Africa (through Millicom, they

sit on sit with operators in Asia and Africa).The company has since than, rapidly

expanded, with its founder shareholders remaining active directors in the

business.

The company specialises in offering different services also provide solutions to

financial and media sector such as consultants in network, technologies, billing,

and services developments.

Due to the wide use of internet, the company is highly developed and has

become wider in its activities to other sectors, thereby, making it gain a strong

telecom market position.

3.2.2 The Whistleblower i.e. the Scandal

The case between Fernandes, the Chief Financial Officer (CFO) for the UK arm

of Netcom, and Netcom Consultants took place over 1999 &2000, when

Fernandes found himself in a very complex and difficult situation of morals and

ethics.

The problem started when the UK Chief Executive Officer of Netcom (CEO) Mr

Stephen Woodhouse started giving his payment claims to the CFO without

receipts, of which Mr Fernandes (CFO) was the person accountable for the

monies been spent by the CEO either through the company’s credit card or by

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cash. The CEO claimed that the receipts were all kept in a large box which would

be handed in to the CFO later, which he never did.

In 1997, when this action by the CEO persisted, the CFO could not handle it any

more, so he decided to fax a letter to the US contact, raising concerns about the

large sum of money claimed to have been spent by the CEO without receipts,

where he was told to turn a blind eyes. In 1999, the CEO’s expenses increased

to about £371,000, all without receipts. It was later realised that the CEO has

been using the money to pay for his personal expenses, thereby putting his own

satisfaction above that of others. Thereafter, fernandes decided to put into

practice his moral duty, by blowing the whistle on Woodhouse’s actions as a

result of cashflow problems which led to the non payment of corporation tax in

the organisation.

Fenandes put in writing his concerns to the US board members, Luxembourg as

well as his UK team members as he could not keep it anymore. Some weeks

after his disclosure, Fernandes was interrogated and was released from

employment with no form of compensation, on the basis of his refusal to pay the

corporation tax and the misuse of unauthorized sum of £317,000 by the CEO. Mr

Woodhouse, despite his deceitfulness, was allowed to retain his position.

3.2.3 Result/ OutcomeFernandes was totally supported by the courts and eventually succeeded under

the Public Disclosure Act 1998 (PIDA) claims, as one of their duty is to give legal

protection to employees who are been dismissed from work as a result of blowing

the whistle against his employer/organisation. At the age of 58, Fernandes won

the case of interim relief. At this age, he was unable to secure a job and thereby,

awarded the sum of £293, 441 as compensation. The CEO later resigned from

work and left the organisation (Mason, 2000 and Eaglesham, 2000)

3.3 ENRON VS SHARRON WATKINS

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3.3.1 BackgroundEnron was one of the world’s largest energy, commodities and Services

Company. It was formed in July 1985, in Houston, Texas. This company was

formed by the merger of Houston Natural Gas and InterNorth of Omaha,

Nebraska in 1985.

In 1999, Enron had expanded into diverse fields such as the purchase of power

plant, the building of retail or wholesale business around the world, which

enables the company provide financial and risk management services to

customers worldwide, and also the launching of a web based commodity site,

well known as Enron Online, thus making it an e-commerce company.

As a result of this expansion, the company successfully recorded revenue of a

revenue of $100 billion in 2000, thereby making it the seventh-largest company

on the fortune 500, and the sixth largest energy company in the world.

3.3.2 The Whistleblowers’ Story (Enron’s Scandal)Sherron Watkins the former vice president of Enron Corporation in spite of the

company’s rapid growth and success knew all was not well with the

organisation’s account, as she suspected an overstatement of the company’s key

assets.

In 1996, Ms Watkins made her concern known to Mr Festow, Enron’s Chief

Financial Officer (CFO) and the company’s auditor Arthur Anderson, but she was

ignored and told off for intruding into accounting matters when she was in the

finance department.

In October 2001, Watkins realized that the CFO had set up a series of companies

to do business with Enron such as the LJM and other off-the-books partnership in

an attempt to inflate their profits and a means to put out of sight Enron’s growing

losses of the company at the detriment of the company’s shareholders. Later,

Watkins realized the level of fraud going on in the organisation, so decided to

blow the whistle on the company’s dangerous financial deals, by sending a

memo to the CEO Ken Lay of gross misconduct as regards to accounting

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irregularities within the organisation. The CEO promised to look into the matter,

where he discovered nothing wrong with the company’s accounts.

When the CFO heard of Watkins word of warning to the CEO, he tried to dismiss

her. In November, Enron admitted to have overstated its profit dating back to

1997 by $600 million.

3.3.3 Result/OutcomeIn December, the Enron was filed for bankruptcy, its value which was at $80

billion some time ago, became a penny stock. Enron’s employees were made

redundant as well as pensioners.

Watkins kept her job until November 2002 when she left the job to become a

corporate governance consultant. She stayed longer in the company then CFO

who ought to be fired, but resigned, and the company’s auditors who did not quit,

but waited to be fired.

Watkins was praised for the part she played in revealing the greed and

dishonesty of the once seventh largest company in America. She also received

several awards for her excellent display of ethics at work place, and was named

Times Person of the year 2002.

3.4 JEFFREY WIGAND VS BROWN & WILLIAMSON TOBACCO

3.4.1 BackgroundBrown & Williamson Tobacco Corporation a subsidiary of British America

Tobacco plc and the third largest manufacturer of cigarettes in the United States

was founded in 1894 in the Tobacco Heart of Winston-Salem, North Carolina and

incorporated in 1906.

The company has oversees operation in Japan and South Korea, and it

possesses about 16% of the US cigarette market. It also put on the market

several mixed brands of cigarette, as well as special line of tobacco products

such as; Kite and Sir Walter Raleigh Bloodhound.

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3.4.2The Whistleblower (Jeffrey Wigand)

Jeffery Wigand popularly known as “the insider” started work with Brown &

Williamson in 1988 as the company’s head of research and development, with a

primary project of developing a new, to put into competitive market cigarettes that

are healthy. During the course of his assignment, Wigand discovered the

company has been deceiving consumers about the Tobacco rhythm “increased

biological activity” which was a form of code for cancer and diseases, and also

the highly additive nature of nicotine used to improve flavour of cigarette, causes

cancer.

As a result of his discovery, in 1992, Wigand refused the usage of these deadly

flavours in cigarettes, but he was told the removal of the flavour would affect

sales, and was asked to mind his business.

In 1993, Wigand was fired and was to face lawsuit on the basis of breaking his

agreement of confidentiality which is not disclose any of the company’s policy.

After his dismissal, Wigand decided to blow the whistle publicly. He testified

about the illegality going on in the tobacco company, by telling the public of the

harmed caused by nicotine in cigarettes it is causing to smokers.

In addition, he disclosed that the Thomas Sandefur (CEO) lied under oath by

telling the congress nicotine was not addictive (Esperon 2005).

3.4.3 Result / Outcome

Wigan lost everything for going public. He lost his wife as she filed for divorce,

lost his kids to the wife, lost his privacy, and his reputation was damaged. It took

him time to heal, but he had to start all over again.

Also, his testimony has brought about $206 billion settlement between the

tobacco company and 46 US states for the costs of treating sick smokers.

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At the present, has been given so many awards and public recognition for his

achievement in revealing helpful information about tobacco’s illegality, which was

detrimental to public’s health.

3.5 HARRY TEMPLETON VS MAXWELL “THE MAXWELL SAGA”

3.5.1 BackgroundRobert Maxwell was an international legend who owned several UK’s national

newspapers, which includes the Mirror Group of Newspapers and the Maxwell

Corporate Communication (MCC).

Maxwell Corporate Communication (MCC) established in 1987, was

incorporated as British printing corporation in1964, with over 14,000 employees

and over 15 publishing business in more than 15 countries.

The Company has interests in providing information for publishing electronic

services in school and college publishing, language instruction, and reference

book and professional publishing. This company was the tenth largest media and

publishing company in British.

3.5.2 The Scandal Harry Templeton had worked for 14 years in Glasgow for the Mirror Group title –

The Daily Record and The Sunday Mail, as a printer operating the presses

owned by Robert Maxwell’s Mirror Group.

Robert Maxwell was disqualified by many as well as Templeton on his bid to

take-over Leasco Data Processing Equipments of the United States. His was

criticised on the basis of manipulation of profits by the Department of Trade and

Industry (DTI) reported in Pergamon Press Ltd. But Maxwell who had carefully

surrounded himself by well- connected politicians, bankers, financiers and

accountants aggressively took over to become the CEO of Mirror Group of

Newspapers (MGN) and Maxwell Corporation Communications (MCC). But this

company was built on millions of debt and fraud loaned from employees’ pension

fund.

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Afterwards, Templeton was appointed as one of the company’s board of trustees

of the Mirror Group Pension Scheme. After Templeton’s appointment, he began

to discover some unusual movement of pension’s monies run by the Maxwell’s

businesses; and he became the only trustee challenging Maxwell’s misuse of

pension funds assets to support the share price of his own company. A meeting

was held with Maxwell by Templeton and other Scottish delegates to make aware

of their concerns where Maxwell denied every request on the misuse of pension’s

fund. This led to Templeton dismissal in 1988, and Maxwell vowed Templeton

would never get any printing job again.

Maxwell was allowed to go on with his preferred evil path until his death in 1991.

After his death, it was later discovered that he had embezzled the sum of £458

million from various pension funds (Calland and Dehn 2004)

3.5.3Outcome/ ResultThis Scandal led to the unfortunate death of many pensioners as they were

worrying about the ability to manage financially when pension payments they

relied upon were either suspended or stopped completely, many pensioners

suffered, while a few received compensation. Shareholders and employees

where not left out in the disaster, as they also suffered financial problems.

The company was insolvent and will be liquidated to pay £2.5 billion in debt. This

was also reported as one of the largest UK’s fraud cases.

Templeton is now the Scottish Director of Public Concern at Work and continues

to support of Whistle blowing. (Calland and Dehn 2004 and PCaW).

visar.csustan.edu/aaba/auditmaxwell.htm - 16k -

4. ANALYSES AND DISCUSSION

4.1 Introduction

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This session presents a synthesis of the study, taking into deliberation the

selected case studies which are the cases of Netcom, Enron, Maxwell and Brown

&Williamson Tobacco and analysing the cases. Our analysis would be based on

the implication of Whistle blowing to their various shareholders as well as the

organisations involved, and also picking the theories and comparing them side by

side with the selected cases, and drawing a conclusion.

4.2 Was duty of Loyalty and Confidentiality breach or Honoured?

The issue of loyalty and confidentiality is still been argued on, as either a good

quality or a wicked act of an employee by researchers Hart and Thompson

(2007).

Every organisation is expected to have laid down rules and regulations in form of

business ethics that would entail employees’ duties, and this should be binding

on all members of an organisation. This makes employees owe to its

organisation the duty of loyalty, confidentiality, morality, to mention a few before

taking up a job. The awareness of these duties will not permit employees

disclose any information of the company to third parties or expose company’s

information to its competitors. Hence, any employee that refuses to comply with

organisations duties as stated earlier can be regarded as a disloyal employee

and should be punished. According to Bok (1980), any employee who blows the

whistle is disloyal, as he/she must have sworn an oath of confidentiality and

loyalty to colleagues and clients.

Despite all duties which employees are expected to comply with, Vallance (1995)

argues that there is no duty of confidentiality and loyalty, and no business can, by

embedded or explicit means, irrespective of the situation tie its employees to

silence. Therefore, the issue of loyal is based on protecting the things that allow

the business to achieve shareholder value over the long-term, in terms of its

reputation, brand protection, the concern for its product as well as customers of

such product.

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Using the case of Brown and Williamson Tobacco Corporation, Jeffrey Wigand

the head of the company’s research and development department raised his

concerned within the company about his discovery of highly nature of nicotine in

cigarette, but was asked to mind his business as the nicotine in cigarettes boosts

sales. He had to blow the whistle in order to create awareness of the danger in

smoking, hence, making him disloyal. Another similar case where employees’

loyalty was questioned is in the case of Netcom, where Fernandes blew the

whistle, a disloyal act though, but at the same time it was an action that saved

the organisation and its shareholders & stakeholders.

As a result of the two whistleblowing cases, Fernandes and Jeffrey Wigan were

justified based on what the theory as they owe the public an utmost duty of

loyalty therefore they should be rewarded as their disclosures were made in good

faith. Also, any other whistleblower that discloses misconduct in the interest of

the public in good faith should also be rewarded. However, any employee that

discloses misconduct for selfish motives making him/her a disloyal employee

should be reviled.

4.2 The misconduct must be seen as serious danger?

The issues surrounding the justification of whistleblowing are the reasons for it,

and the motive that lie behind the action (Hunt, 1997). Every whistleblower’s

action need to be justified, and one of the conditions justifying whistleblowers

action is that the perceived wrongdoing is expected to be of serious danger

before deciding to blow the whistle. This serious danger could be danger to

health, the organisation, or to shareholders of the organisation. Although Davis

(1996), argued that justifying whistleblowers action is irrelevant.

Using the cases of Fernandes, Templeton (Maxwell Saga) and Jeffrey Wigand to

justify this review of literature, we can see that Fernandez decided to blow the

whistle because company’s fund had been spent carelessly by his boss, and as

such affect employees, shareholders and other members of the organisation in

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the long run. Templeton on the other hand knew pensions funds was misused

and diverted to support share price of Maxwell’s own company. The same as

Wigan when he discovered keeping silence to his company’s misconduct would

result many smokers loosing their lives as a result of cancer. All three

whistleblowers recognize that if illegality in their various organisations is not

reported, several parties would be in serious danger. Such parties are the;

shareholders, pensioners, employees and the organisations itself.

However, in as much as a whistleblowers’ action tends to save people from

serious danger in the future, they should be rewarded, but if any whistleblower

goes against this, such whistleblower should be reviled.

Is the whistleblower’s action in line with his/her responsibilities?

According to Bowie (1982), one of the ideal requirements for justifying

whistleblowers act is that the whistleblower must act in accordance with his or

her responsibilities for exposing illegality. Whistleblowers are expected to raise

concern or expose wrongdoings that are related to their duty, not just expose

illegality they know nothing about.

Fernandes was able to raise concern and expose the actions of his boss

because he was the company’s chief accountant; one of the responsibilities of an

accountant is to monitor financial matters including the inflow and outflow of cash

in and out of an organisation.

On the other hand, Watkin knows nothing about finance, as she was the vice

president, but decided to blow the whistle because she discovered the

companies account was been overstated. Her disclosure was not in line with her

responsibilities.

From the above analysis, we can say that Fernandes action could be justified,

since he did not blow the whistle on what he knew nothing about. Unlike Watkins,

though there were illegal actions taking place in Enron, but it was not in line with

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her responsibilities. Therefore, we can say that Fernandes should be rewarded

as his actions were justified, but Watkins should be reviled as her actions did not

meet the condition for justifying whistleblowing.

Consequences to Organisation, Shareholders and Whistleblowers.Shareholders are regarded as fund raiser for organisation; thus any decision

made in an organisation must be of great benefit to them this should include the

decision to blow the whistle which should also be of great benefit rather a cost to

the shareholders &stakeholders, the organisation and the whistleblowers.

Near and Miceli (1992) posited that some of the short-term outcome of Whistle

blowing is that wrongdoing might be continued, ignored, rectified and at times the

whistleblower is retaliated against, while in the long-term Whistle blowing could

bring about negative organisational outcomes or positive organisational

outcomes.

Considering the case of Netcom vs. Fernandes, it was evident that Fernandes

decided to blow the whistle in order to stop the action of CEO who embezzled the

company’s fund for personal expenditure at the detriment of the owners

(Shareholder), stakeholders and the organisation.

Fernandes action was criticised though, as in the short-run his action was of

more cost to shareholders, the organisation and the whistleblower than benefits.

It was evident that Fernandes was dismissed short-term, but was later rewarded

as the action was rectified. His action in the long-term eventually helped brought

about positive organisational outcomes, as Netcom regained its reputation in the

market and thus enhanced shareholders value.

On the other hand, the case of Enron is a bit different. Enron decided to

overstate its account in order to have a good reputation in the market as well as

to enhance shareholders value, but at the end, their action completely ruined the

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company’s shareholders value and other stakeholders as the company finally

liquidated. Sharron Watkins the vice-president of Enron Corporation blew the

whistle after many damages had been done. Her action in the short-term brought

about no response to the illegal act neither was the act rectified. But instead

Sharron’s action in the long-run caused the shareholders and stakeholders more

harm than any good as shareholders lost all there investments and employees

were lay off without pension nor compensation.

If only she had kept silent, maybe there would have been room for correction,

and maybe Enron would not have liquidated. Near and Miceli (1992), stated that

the option of keeping silent may give room for management of an organisation to

correct the wrongdoing. This might have been the case of Enron.

Based on both cases, Sharron blew the whistle not for the sake of the

shareholders &stakeholders interest, but to protect her reputation. Thus, such

action does not deserve any form reward, because the cost of her action

outweighs its benefit. But Fernandes action was at his detriment and in the

interest of all i.e. (shareholders, stakeholders and the organisation). The benefit

of his action outweighs the cost and should be rewarded again and again as the

company still stands strong till date due to his actions.

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Ethics of Corporate GovernanceOn account of several accounting scandals, practices of corporate governance is

been established on a daily basis, as management of organisations owe an

ethical duty of good corporate governance to its shareholders and stakeholders.

According to Olander (2004) and Fel (2003), a clear commitment of ethical

responsibilities is expected to be exhibited by management of different

organisation in order to improve performance.

From the cases of Maxwell Saga and Enron Corporation, it is evident that both

companies fell as a result of the lack of good organisational corporate

governance. Templeton the company’s printer was the only employee bold to

confront and raise concerns to the CEO (Maxwell) over the misuse of pension’s

fund. All his action was in the interest of pensioners, same applies to Enron as

deaf ears were given to the whistleblowers.

One of the developed OECD’s (Organisation for Economic Corporation

Development) principles of corporate Governance is that corporate governance

should provide form of relationship between a company’s’ management, its

board, its shareholders as well as other stakeholders of the organisation.

Judging from what researchers have said about corporate governance what

actually happened in the case of Maxwell Communications and Enron

Corporation, we can see that both organisations exhibited no ethical

responsibility to corporate governance and their action were based on corporate

greed and selfishness as the CEO’s never conformed to the principle of

corporate governance. Both companies lacked the ability to carry out a good

ethical decision and at the end of their inability to conform to the value of good

corporate governance principles, woeful performance of both companies as to

stakeholders were badly hurt and shareholders value totally diminishe

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4.4 Are Whistleblowers Protected?Legal protection has been put in place to protect employee from retaliation, or

compensate them if the by any way suffered retaliation (Near and Miceli, 1992)

Therefore, in order to encourage Whistle blowing and compensate the individuals

concerned for the risk they undertake or are prepared to undertake in the UK the

Public Interest Disclosure Act (1998), was established to give support and protect

whistleblowers in the private, public and voluntary sector from unfavourable

action or victimisation from their employees if, the whistle is blown in the interest

of the public.

Fernandes is the employee that blew the whistle against his boss, as a result of

his mismanagement of fund. Fernandes action to exhibit his moral duty of

Whistle blowing led to his release from employment without any payment and

was sued.

Due to the establishment of the PIDA to protect whistleblowers from retaliation,

as Fernandes was supported under the Public Interest Disclosure Act (PIDA) and

was compensated with the sum of £293,441 because his action was in the

interest of the public. Therefore, we can say that the establishment of the PIDA is

indeed of great benefit to whistleblowers, though it has its shortcomings, but it

still stands as great protection and a means of encouraging potential

whistleblowers.

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Summary

5. CONCLUSIONS AND RECOMMENDATIONS

5.1 INTRODUTIONThe spotlight of the study is based on whether whistleblowers should be

rewarded or reviled with reference to selected case studies. In the preceding four

chapters, the statement of problem was introduced; the research objectives were

also defined. Second, theories from the significant literature were reviewed.

Third, based on the review of literature, selected case studies were examined.

Fourth, theories from our literature review and some selected case studies was

analysed and discussed side by side. This last part concludes the research by

examining the conclusion and recommendation for future research on this study.

CONCLUSIONS

After all that has been discussed above, we can conclude that all whistleblowing cases are different, therefore, we can never have a standard to whistleblowers should be rewarded or reviled. If all whistleblowers are to be reviled, then there would be injustice because those who blow the whistle in the interest of the public i.e. with good motives will suffer. On the other hand, if every whistleblower is to be rewarded, then those who blow

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the whistle for selfish interest or for the purpose of fame will go unpunished. The most important thing for an organisation to do is to good corporate governance that should be followed

REASONS FOR IMPLEMENTING WHISTLE BLOWING POLICYWhistle blowing policy/procedure should be implemented not only by

management of organisations, but it should also be implemented in universities,

non-profit making entities, as well as government entities (Eaton and Akers,

2007).

Lewis (2006) examines reasons why management of various organisations,

entities and institutions should desire to create and implement a Whistle blowing

policy. These reasons are;

To contribute to the efficient and effective running of the organisation, by

discouraging management or individuals from malpractice and instilling

the fear of its consequences.

To help keep up the good name of the organisation by providing a means

of justifying ones action/decision.

It can help reduce public disclosure as a result of proper conformity with

the law.

It is a good practice that needs to be implemented as its benefits

outweighs its cost.

Furthermore, this policy when implemented has a great possibility of reducing

fraudulent activities in addition to the fact that it sends good indication to both

internal and external bodies such as its stakeholders (Eaton and Akers 2007).

Olander (2004) also stated that the policy should be implemented so as to tackle

the issue of reporting violations of the code of conduct. The policy is also to ban

unlawful action of any kind.

Despite the fact there exists the needs, by employers to have high values of

ethical conduct in their mission statement, this goal was hard to achieve as the

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method of Whistle blowing procedure/policy were recently hardly ever used. UK

employees are not usually forced by the Public Interest Disclosure Act 1998

(PIDA 1998) to create the Whistle blowing policy, but several benefits are usually

given to those who have them. The Public Concern at Work (PCAW) (1998),

states that “unless there are effective procedures in place which demonstrate

your organisation’s willingness to listen and address concerns, employees are

likely to take their concerns outside – and to be protected by the Act in doing so.

Employers with good Whistle blowing policies and procedures are less likely to

be exposed to claims under the Act. Additionally, it is less likely that any wider

public disclosure will be protected under the act”.

DEVELOPING A WHISTLEBLOWER POLICY

Organisations should have an appropriate policy in place which should serve as

guideline to be followed by employees if any malpractice is suspected.

Employees, as well as accountants and internal auditors, are all expected to go

behind these policies. (Elliot and Elliot 2007)

Management may possibly decide to draw up and put into practice a

whistleblower policy. In developing this policy, a clear definition of Whistle

blowing must be stated. Before this policy can be properly implemented, it must

be submitted to the board of directors, audit committees as well as the non-

executives members who are usually the shareholders representatives. Other

important aspects or (view points) of a whistleblower policy examined by Eaton

and Akers (2007), includes the following:

Clear definition of individual covered by the policy;

A whistleblower policy has to cover persons within and outside the organisation

as long as the outsider performs business with the organisation. For example, for

a manufacturing company, those covered may include employees, employers,

suppliers, customers as well as shareholders.

Confidentiality

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Another important element of any whistleblower policy is the aspect of

confidentiality. This issue is mostly of great concern of many individuals, because

employees crave for an environment whereby he/she is free to raising any false

claim, and if such environment is created, maybe many more claims will be

reported and filed. Then again, employees want to feel open to submitting their

names for any further investigation. Therefore, the Whistle blowing policy has to

clarify how claims will be treated when received and whether any feedback

should be expected by employees.

CommunicationFor a whistleblower policy to be well effective and efficient, it must be properly

communicated to employees, customers, suppliers and shareholders. All these

stakeholders must have assess to information on intranet sites, and training

programmes could also be made available to them on how to answer questions

of Whistle blowing policy.

ProcessFor employees to file their claims, a due process needs to be followed. This

process must be well stated in the whistleblower policy. Organisations may

oblige employees not to omit any chain of command when trying to make any

claim. Employees filing any claim can also do so by using reporting mechanisms

such as hotlines, websites or suggestion box.

Nonretaliation provisions

As a result of whistleblower policy, employees who report any crisis ought to be

prohibited from retaliation. Therefore, ways by which employees, customers,

suppliers as well as shareholders should be to report fraudulent actions or file

claim in good faith must be stated in the whistleblower policy, as this will serve as

a means of encouraging them.

As soon as the policy is been concluded, the organisation ought to be consistent

with the policy as regards to the implementation and enforcement mechanism.

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In conclusion, to create an atmosphere for a whistleblower to file his/her claim or

report a wrongdoing is a very difficult task. Therefore, for a wholly successful

whistleblower policy, it must be consistently implemented, the claims must be

well investigated and evaluated and proper action must be taken when required.

Ettore (2004) view the act of whistleblowing as when individuals earn themselves

unfavourable nickname such as “rat-rink”, “snitch” as a result of their mindset on

the concept of informing versus loyalty. Calland and Dehn (2004) also described

it as the disclosure of wrongdoings that threatens others, rather than an

individual/personal injustice.

Uys, T. (2005) Betrayal, loyalty &trust: The social psychology of whistleblowing.

Paper read at the international Institute of Sociology: Frontiers of Sociology ,

Stockholm, Sweden 5-9 July 2005

Jos, P.H., Tompkins, M.E., & Hays, S.W. (1989) ‘In praise of difficult people: a

portrait of committed whistleblower’, Public Administration Review, November

/December: 552-561

Finn, D.W. (1995) ‘Ethical decision making in organisation: An employee-

organisation whistle-blowing model’, Research on Accounting Ethics 1, 293-315

Barnett, T. (1992) “A preliminary investigation of the relationship between

selected organisational characteristics and external whistleblowing by

employees” Journal of Business Ethics 11:949-959

King, G. 111 (1999) ‘The implication of an organisation’s structure on

whistleblowing’, Journal of Business Ethics 20: 315- 326

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Somers, M.J. and Causal, J.C. (1994) ‘Organisational commitment and whistle-

blowing: A test of the reformer and the organisation man hypothesis’, Groups &

Organisation Management, 19(3), 270-284

Dehn, G. (1999) Whistleblowing to combat corruption. Public Concern at Work.

Available online at: http://www.u4.no/document/literature.cfm?key=40.

(Accessed: 24th march 2008).

Binikos, E. (2006) A sociological case study of the relationship between

organisational trust and whistleblowing in the workplace. Unpublished masters

dissertation Johannesburg: University of Johannesburg

Westman, D.P and Modesitt, N.M. (2004) Whistleblowing: The law of Retaliatory

Discharge 2nd edn. Washington: BNA Books.

Bowie, N. (2002) The Blackwell guide to business ethics. Blackwell Publishing.

Langford, J.W and Allan, T. (1994) Corruption character and conduct: Essay on

Canadian Government Ethics. Toronto Ont: Oxford University Press, 1994.

Lewis. D.(2006) The Content of Whistleblowing /Confidential reporting

procedures in the UK. Some lessons from empirical research; Vol.28, No. 1 2006

pp 76-86

Lewis, D. (1998) “The Public Interest Disclosure Act 1998”, Industrial Law

Journal, Vol.27 No.4, pp. 325-330.

Elliot. B. and Elliot. J.(2007), Financial Accounting and Reporting, 11th edn.

Pearson education limited.

Dr. Romulo, E.A (2006) Stakeholder’s Awareness, Attitudes and Concerns

regarding whistleblowing

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David, A. (2005) Whistleblowers: Who they are and how management should

respond. Journal of Relevant Business Information and Analysis, Vol.8, Issue 4

Iannone, A.P. (1989) Contemporary Moral Controversies in Business, Oxford

University Press, Oxford and New York.

Hoffman, W.M and Moore, J.M. (1982) ‘What is business ethics? A reply to

Drucker’, Journal of Business Ethics, Vol. 1, no.4, pp.293-300

Orr, L.H. (1981) ‘Is whistleblowing the same as informing?’ Business and Society

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