Should Whistleblowers Receive a Reward for Speaking Up?

An edited version of this article first appeared in the Australian Financial Review


The increased exposure recently provided to the actions of whistleblowers at organisations like CommInsure, Theiss and 7-Eleven is, in a perverse way, a very positive development. Obviously we feel for those who under extremely difficult circumstances have taken considerable personal risk to expose wrongdoing, especially if their selfless actions have come at a cost. This latter outcome can never be excused. However, the increased publicity is proving to be a catalyst for change.

And there is no question that change is needed. At the organisational level companies must begin to recognise that there are enormous benefits associated with giving employees voice. Even the best laid compliance framework has limitations, and the most effective way to overcome these is to promote and embrace a speak up culture – employees shining a torch on poor conduct should be cherished not chastised.

But change is also required at the regulatory level. The current legislative framework surrounding whistleblowing in Australia can at best be described as patchwork. The level of protection a whistleblower is afforded depends on whether they are a private or public sector employee and the jurisdiction in which they find themselves in. Far from ideal.

Some have even gone as far to suggest that a U.S. style bounty system should be introduced, where whistleblowers are rewarded for reporting wrongdoing. Although I support the push for regulatory reform, I remain to be convinced on the efficacy of a reward system.

I recently attended a conference at the Stern School of Business in New York hosted by Ethical Systems and the Behavioral Science and Policy Association. One of the panel discussions was aptly titled “Beyond carrots and sticks: How to encourage a speak up culture.” The panelists, comprising of leading academics and practitioners, discussed some of the factors that we know can help or hinder the development of a speak up culture.

For example, working for ethical leaders and being surrounded by supportive colleagues greatly increases the likelihood that people will speak up. So too does the existence of “psychological safety”, a dynamic where people feel that they not only can voice their values, but when they do so they won’t be ignored or shunned.

On the flip side, people will be far less likely to speak up in organisations where it is perceived that there is no justice, or that raising concerns comes with consequences. That is to say, “fear and futility” are two of the biggest silencers of employee voice.

However, there was also an admission from the panellists that there is a lot we don’t know. In presenting findings from some of his preliminary research, Assistant Professor Sean Martin from Boston College illustrated how people perceive speaking up about ethical issues to be far more “scary” and less “easy” than speaking up about a problem that doesn’t have an ethical dimension or speaking up with new ideas.

But why is this so? And what motivates some people to speak up on ethical issues when others may not, especially within environments that may not encourage them to do so? And would the introduction of a reward system necessarily change this?

An Australian research initiative, “Whistling While They Work”, led by Griffith University’s A J Brown, will help shed light on some of these unknowns. The research, which is open to any Australian or New Zealand organisation, is ambitious in its reach. It will explore, amongst other things, the incidence and significance of whistleblowing, the experience of whistleblowers, and what constitutes superior or inferior organisational responses. It is the first research project of its kind, worldwide, to explore the latter of the above issues.

The research will be revealing and provide much needed data. In addition to confirming some of the existing knowledge base, I expect that it will uncover numerous examples of employees who after having exposed wrongdoing in their organisations, have flourished rather than suffered through the ordeal. We need more of these stories.

These stories will help paint a picture of the circumstances within organisations that help promote employee voice. It is by working hard to cultivate these circumstances that leaders will successfully create environments rich in challenge and feedback. In these environments, whistleblowers will not require, or for that matter be motivated by, incentives.

The risk with adding incentives into the mix is that they skew motivations, creating scenarios where people see whistleblowing as an opportunity to “hit the jackpot” rather than an act of virtue, something that the U.S. experience has demonstrated. I find it ironic that we view incentives as a potential mechanism to help address some of the challenges associated with whistleblowing given the central role they have played in many of the ethical failures we have witnessed in the business world.

Carrots and sticks are not the answer. The best approach is to create environments within organisations where speaking up is encouraged, embraced and normalised. But I stand to be corrected once the “Whistling While They Work” data speaks.

Dennis Gentilin is the author of “The Origins of Ethical Failures” (Routledge, 2016) and is an Honorary Fellow at the Centre for Ethical Leadership.

*Image courtesy of the FCPA Blog