What is a whistleblower and why would companies need a whistleblowing system?
Whistleblowers are employees, vendors, suppliers or partners who hope to stop wrongdoing within organizations by exposing it. This wrongdoing could be unethical behaviour by another employee or dangerous illegal activity by a superior.
Companies benefit greatly from whistleblower reports, which frequently reduce waste, expose theft and bring unethical situations and practices to an employer’s attention. In addition to saving the company (and its shareholders) money by preventing unnecessary losses, whistleblowing can also preemptively save a company’s reputation. By discovering and addressing serious issues through internal reports, a company avoids potentially embarrassing discoveries by clients, the press or other third parties.
Companies depend on their employees to follow industry laws and codes of ethics in place, ensuring a smoothly run, effective and profitable business on which clients can depend. However, as the size of a corporation increases, so does the difficulty of ensuring that every individual employee or department follows these rules.
Whistleblowers are the employees within a company who help with this problem. They are people who, when they see wrongdoing, feel that they must respond to the issue for the sake of the company, the other employees or the public. They often desire to report the problem within the company to bring about an internal solution. This helps the company spot and rectify hidden issues before they become serious problems for the business as a whole.
Unfortunately, though laws enacted in both Canada and the United States explicitly protect whistleblowers from retaliation, these employees can still face some form of discrimination, job penalty or even intimidation. Such retaliation might include job termination, demotion, cut hours or a dock in pay. Concerned employees are far more likely to come forward to report a problem in any company if they know their identity will be protected and their job safe. Third party services exist to provide this kind of security to employees through avenues like anonymous hotlines and secure web reporting. The number one method of detecting fraud within a company is through tips – usually from employees. The best way to encourage employees to come forward is to educate them on their ethical duties and then provide them with the tools to come forward anonymously and confidentially. This is where a whistleblowing system is key.
Two examples of companies that would benefit from whistleblowing:
A trucking company needing a whistleblower for safety
A trucking company may employees driving longer hours than what is safe and than what is prescribed by industry regulations. This might have been initiated by the employees themselves or required by a manager. Either way, driving excess hours not only violates regulations but also represents to the company a significant risk related to potential accidents, injuries and property loss caused by fatigued drivers. If an anonymous employee hotline is in place for employees to report violations of ethics and standards, then the dispatcher who observes this dangerous activity does not have to worry about whether she will be targeted by co-workers or superiors; she can simply make her report.
A home repair company needing a whistleblower to protect their reputation
Another example is a home repair company with an employee who routinely charges customers for unnecessary services. This kind of dishonesty, once publicly exposed, can seriously damage a company’s reputation in a field where reputation is key. A worker who realizes that the work he performs is repeatedly unnecessary may want to come forward, but be concerned about his job security. Again, having an anonymous ethics hotline or whistleblower service in place empowers the employee to report such detrimental behaviour without fear of reprisal.