Emerging unscathed from whistleblowing: utopia or reality?


Date : 04/12/2018

UCLouvain, December 4, 2018

Over 120 attended the conference “Emerging unscathed from whistleblowing: utopia or reality?” on the 4th of December in Louvain La Neuve organised by Transparency International Belgium and Louvain School of Management. Dominique Dussard, Chair of TI-Belgium, opened the conference with a word of welcome.  He thanked Louvain School of Management and Carlos Desmet for organizing and international brewer AB Inbev and Fairtrade chocolate manufacturer Belvas for sponsoring this event.

Mr. Dussard described transparency as the antidote to corruption and whistleblowing as a means to achieve transparency whereby three important elements were needed for effective whistleblowing:

With a warm welcome, Dr Wim Vandekerckhove was introduced to the audience as the moderator of the evening. Wim Vandekerckhove is expert to Transparency International and Reader in Business Ethics, Human Resources and Organisational Behaviour at the University of Greenwich. He has researched business ethics, and in particular whistle-blowing, for many years and obtained a PhD on the topic in 2001, when the concept was still relatively new. In the meantime, a lot has changed.

Dr Vandekerckhove opened the discussions by outlining the history of whistleblowing and the evolution of corporate reactions thereto over around 40 years. He framed whistleblowing as being a universal phenomenon and fundamentally human. It has always existed and meets the need to speak up when people perceive something as unjust. The term whistleblowing first emerged in the 70-ties in the US, when Ralph Nader, a young activist and later independent candidate running for president, criticized a number of corruption cases. He defined whistleblowing as “an act of a man or woman who, believing that the public interest of the organisation he serves, blows the whistle that the organisation is involved in corrupt, illegal, fraudulent or harmful activity”. He referred to organisations in the public and the private sector, that develop into a ‘world’ with dynamics that are disrespectful of the common good.

Now, 45 years later, this is still the heart of the issue.

A difference in tone can be noted looking at two business leaders at different times in history. It illustrates how whistleblowing shifted from espionage to an asset for a company:

James Roche, Chairman of General Motors in 1971, mentioned:

“Some of the enemies of business now encourage an employee to be disloyal to the enterprise. They want to create suspicion and disharmony and pry into the proprietary interests of the business. However, this is labelled – industrial espionage, whistleblowing or professional responsibility – it is another tactic for spreading disunity and creating conflict”.

Warren Buffett writes in 2005 in his annual letter to shareholders of Berkshire Hathaway:

“The second reform concerns the ‘whistle-blower line’, an arrangement through which employees can send information to me and the board’s audit committee without fear of reprisal. Berkshire’s extreme decentralisation makes this system particularly valuable both to me and the committee. (In a sprawling ‘city’ of 180.000 – Berkshire current employee count – not every sparrow that falls will be noticed at headquarters.) Most of the complaints we have received are of “the guy next to me has bad breath” variety, but on occasion I have learned of important problems at our subsidiaries that I otherwise would have missed. The issues raised are usually not of a type discoverable by audit, but relate instead to personnel and business practices. Berkshire would be more valuable today if I had put in a whistle-blower hotline decades ago.”

In the 80-ies, scientists generated many interesting insights on whistleblowing. Marcia Micelli, psychologist, Janet Near, sociologist and Terry Dworking, legal expert, were key actors, that defined the current commonly used definition for whistleblowing:

“Whistleblowing is the disclosure by organisation members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organisations that may be able to effect action.”

New was the concept of a whistle-blower being a loyal employee with the desire to stop a wrongdoing but being unable to do this on his/her own steam. Micelli, Near and Dworking for the first time described whistleblowing as a process, starting with an internal message that potentially could escalate, depending on the type of reaction the whistle-blower would get.

Dr Vandekerckhove mentioned two important elements evidenced by international research:

Legislation, mostly to protect whistle-blowers but in the US also to encourage it, started in the 1990s in the US followed by Australia, UK, Belgium (but only for public sector) and now at EU level a proposed Directive is in process. Transparency International played an important role to keep this topic on the European agenda. If the directive gets adopted, Belgium would be forced to catch up with more extensive national legislation.

A brief video showed two major cases of whistleblowing involving the NHS in the UK. The video of a BBC television news-clip highlighted the risks to whistle-blowers in terms of damage to their careers, loss of jobs and “punishment”. The video highlighted the cases of two doctors in the NHS who had been forced to move to Australia to find new employment. As a side note, it was mentioned that moving countries and even moving continents is not always a solution to escape from the whistle-blowers’ legacy. A simple search on the internet was usually enough to find stories related to the case.

The panellists were introduced by the moderator, and the discussion was opened starting with the question how whistle-blowing played a role in their respective professional activities:

For Alain Lallemand, Investigative journalist at Le Soir, whistle-blowers essentially were « sources », requiring anonymity and protection to allow them to talk about something in the public interest. The matter of trusting an anonymous source, was not of high relevance to Mr. Lallemand. Checking the trustworthiness of his sources was part of his responsibility as an investigate journalist. Without protection of his sources, the mechanism of whistle-blowing, would not function in journalism. Too much would be at stake for the whistle-blower and the people around him/her.

Thierry Gillis, Inspector General at General Inspectorate of the Federal and Local police mentioned that all police were effectively whistle-blowers in their work on dealing with crime. He noted the difference between internal whistle-blowers and informants. He questioned the position of whistle-blowers who blew the whistle on criminal activities in which they were themselves involved.

Mona Caroline Chammas, Founder of GOVERN&LAW and Government & Business Counsel, noted that whistle-blowers were not always individuals (e.g. under anti-corruption law) but could also be companies in one form or another (e.g. under competition law), such as companies involved in cartels who blew the whistle both about themselves and against co-conspirators, to avoid or be imposed more lenient sanctions from competition authorities, such as the EU. Hence the crucial role of the compliance functions/offices within companies and interesting studies on corporate governance and challenges around compliance (e.g. OECD Trust&Business Report).

Philippe Deschamps, General Counsel and Company Secretary at Celyad noted the importance of corporate reputations and the whistle-blower as a significant source in protecting that reputation. In addition, whistle-blowing gave organisations the opportunity to fix issues that otherwise would remain below the radar. Working in an international business environment, Mr. Deschamps experienced the importance of designing reporting systems adapted to the national legal and cultural circumstances. In the US for instance, a hotline was often the first channel used, whereas in Europe, whistle-blowers started their journey by talking to their manager (if he or she was not involved), in a second instance, they would report to HR, a person of trust or someone at the legal department and only if all internal channels would not lead to action, a hotline or a journalist came into play. Mr. Deschamps also cited the importance of “tone at the top” in the context of corporate whistle-blowing.

Aided by a series of multi-choice questions for the audience, discussions then focused more to the issue of protecting whistle-blowers. The risks to their careers, jobs and well-being should not be underestimated. Mr. Gillis saw the protection of whistle-blowers as of prime importance and stressed that it still required a lot of courage for whistle-blowers at the police to speak up even though police officers had a professional duty to report. Despite the efforts the organisation had made to create a culture of trust and support for whistle-blowing, people still find it very hard to report about a colleague. The fact that their investigations in most cases led to the source, anonymous or not, was of course not reassuring for a whistle-blower.

Mr. Lallemand added that private investigators were very powerful. Employees in some sectors were also bound by professional secrecy, which was another obstacle for whistle-blowers to reveal wrongdoings. Investigative journalists had to be alert at all times of the risks. Le Soir received on average 3-5 interesting cases per week. It was a matter of morality, Mr. Lallemand added, to ensure security of phone lines, encryption of messages and to enable the entire wiping out of all traces at any moment in time.

At a company level, restrictions on anonymous or external whistle-blowing could sometimes be found in the employment contract Ms. Chammas remarked. She stated that anonymity was seen as an effective way to incentivising whistle-blowing in the first place, but it often turned out as an obstacle for the investigation hindering effective follow-up. Furthermore, Ms. Chammas pointed out the need to distinguish between anonymity, which in the case of in-house corporate whistleblowing might hamper investigation of alerts, and confidentiality for the whistle-blower and recipient of the alert. A key role in whistle-blowing was not only whistle-blowers, but also the recipient(s) of the whistle-blowing alerts: the recipient’s conduct, power, resources, independence, guarantees of confidential treatment. Those were paramount factors of trust and effectiveness. Reprisals against whistle-blowers should be clearly deterred and punished in order for the system to be sustainable.

In discussing rewards for whistle-blowers, current in the US, most were against rewards as such, but rewards should be distinguished from appropriate compensation for whistle-blowers, which was an essential element given the significant damages suffered by whistle-blowers.

Mr. Gillis explained that the police could not justify rewards for whistle-blowers. Being a public service, technically, a whistle-blower only does his/her duty.

Ms. Chammas briefly commented on the draft EU Directive, which was currently in progress. Once adopted and then reflected in national legislation it should do much to fill the existing gaps in whistle-blower protection within the EU, for example the private sector in Belgium.

After limited questions, in which lobbying was raised as a subject, the conference was closed with thanks to all partisans, the panellists and moderator.

The worst thing to do is to ignore whistle-blowers’ concerns. Treat people well, listen to them, collect the info and act upon it, and if you do not, explain why. Walk the talk and if you do that, they will not walk away and talk”. A final remark from panellist Mr. Gillis.

Authors:

Michael Clarke

Hanneke de Visser