Why whistle-blowing is good for business

Establishing internal procedures for employees to report unethical behaviour could prevent firms facing revelations like those...

Establishing internal procedures for employees to report unethical behaviour could prevent firms facing revelations like those that overwhelmed Enron and WorldCom, writes Ross Bentley.

"Whistle-blowing is not an easy thing to do", says Theo Blackwell, chief policy specialist at the Work Foundation. Employees may be the first to come across malpractice but they also have the most to lose so, if firms do not make it possible for them to report it, they might take the information elsewhere or not raise it at all, he says.

Blackwell says that organisations that don't set up a whistle-blowing policy could be missing a trick. "Imagine you are a director of a company and you only hear about a major problem when it is too late to do anything," he says. Having an established route for issues to be raised is an important part of a risk management strategy and can be a good corporate governance tool.

A recent survey by the Work Foundation found that almost half of the 281 organisations polled had no formal policy about how to raise concerns about corporate behaviour - 32% in the private sector and 75% in the public sector.

Yet it is three years since the Public Interest Disclosure Act came into force, encouraging organisations to set up whistle-blowing policies; providing protection against victimisation for staff who raise concerns; and allowing employment tribunals to compensate whistle-blowers who are victimised. So far 930 claims have been lodged with employment tribunals.

Blackwell says that attitudes to whistle-blowing are changing. "Most people recognise that there is a need to stop wrong-doing - whether it be calling ChildLine, contacting Crimestoppers or revealing corporate malpractice - things like this are separate from being a 'snitch'."

Policy blueprint
  • Make whistle-blowing policy easy to understand

  • Invite feedback from managers, staff, unions and lawyers

  • Take steps to distinguish genuine concerns from malicious complaints

  • Ensure that staff know their rights; provide an independent contact

  • Contact charity, Public Concern at Work, for advice: tel 020-7404 6609, www.pcaw.co.uk
This was last published in July 2002

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