Whistleblowing: What Is It?

Whistleblowers can be described as people who report fraud or corruption to their community for the safety of the person who is in the “position to rectify the wrongdoing.” Most of the time, whistleblowers work in organizations where corruption occurs. What distinguishes the regular employee from a whistleblower is that a whistleblower will detect information about wrongdoings that would have gone unnoticed.

There are multiple reasons why whistleblowers accomplish what they do. Many reward programs are formed by government officials as a way of motivating employees to detect wrongdoings. Studies have proven that corporate misconduct is reduced significantly when employees take action. The effectiveness of employees identifying fraud is greater than the fraud detected by shareholders, media, or examiners. Many awards that soar to tens or hundreds of millions are placed for individuals who come forward with vital information. Additionally, many whistleblowers are motivated by ethical reasons. An abundant number of whistleblowers reveal hidden truths because they believe it is “an ethical obligation to do so.” Even though employees who choose to bring fraud to light may suffer demotion or termination from their employers, they are brave enough to stand up against illegal or unfair injustice. While the motivation of whistleblowers may seem to come from government rewards, most people act out of obligation and only file a tip for government rewards when their employers do not act accordingly.

Whistleblowers are considered substantially helpful for reducing corruption in work environments. A study conducted by PricewaterhouseCoopers in 2007 reported that only 19% of fraudulent activities were detected by professionals. On the other hand, whistleblowers were able to identify 43% of the wrongdoings. According to The WhistleLink Blog, there are six main benefits of whistleblowing:

1. Helps combat fraud

2. Avoids reputational damage

3. Prevents issues from escalating

4. Reduces losses

5. Raises awareness

6. Creates an open culture

Whistleblowing encourages people to speak up and expose the wrongdoings of their work setting. Additionally, the risks of fraud are decreased because of the sheer presence of a whistleblowing system, which can intimidate many employees. Furthermore, if fraud is detected by the public or information about the fraud is leaked, the company’s reputation could possibly be damaged. Preventing the escalation of issues is another benefit. Whistleblowers are able to catch fraud before it becomes a serious problem, which can prevent large amounts of harm. When risks are identified early, losses can be prevented as well. Whistleblowers raise awareness within organizations that need to be addressed and encourage a better, more honest working environment.

However, there are instances where the whistleblower is incorrect. When this occurs, the whistleblower should not have to face consequences, as long as their accusations were based on accurate information. If an employer fires a whistleblower due to incorrect allegations, they are able to file claims for unfair dismissal no matter the time period they worked for their employer.

References:

National Whistleblower Center. What is a Whistleblower? [Internet]. National Whistleblower Center. 2023. Available from: https://www.whistleblowers.org/what-is-a-whistleblower/ 

Acentares A. Why Do People Blow the Whistle? - Examining Ethical Motivations [Internet]. Katz Banks Kumin LLP. 2023. Available from: https://katzbanks.com/whistleblower-blog/what-motivates-whistleblower/ 

Whistlelink. 6 benefits of whistleblowing organisations cannot afford to ignore [Internet]. Whistlelink. 2021. Available from: https://www.whistlelink.com/blog/how-whistleblowing-benefits-organisations/ 

What happens if a whistleblower is wrong? [Internet]. www.springhouselaw.com. 2021. Available from: https://www.springhouselaw.com/knowledge/what-happens-if-a-whistleblower-is-wrong 

What is a whistleblowing system? (FAQ) [Internet]. EQS Integrity Line. Available from: https://www.integrityline.com/expertise/blog/faq-whistleblowing-system/ 

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