Whistleblowing - 28 Oct 08

Whistleblowing - 28 Oct 08

This week Peter Day finds out what happens when people at work blow the whistle...on their colleagues or the organisation they work for.

About this programme

Why did nobody notice how wrong things were going in the global financial system? And if they did notice, why didn't they draw other people's attention to it?

It seems that we need more whistleblowers..employees who felt something was wrong in their workplace and told the bosses about it.

British Law

Ten years ago, Britain introduced what was then regarded as a ground-breaking law to protect whistleblowers in companies and other organisations. It shielded them from victimisation, and it followed several highly publicised cases where fear apparently blocked the revelation of eventually fatal shortcomings in public or private organisations.

This Global Business examines the state of play in several countries 10 years after that British attempt to legitimise the practice.

Corporate culture

But it set me thinking about corporate culture..the unspoken rules and references that dominate most workplaces, inherited and refined over the years.

Most organisations make curious assumptions about the shared goals of their workforce. The new faces at the top are far away, the corporate change of strategy is a lurching change of direction, messages about new priorities are "cascaded" through the email system so that eventually they percolate through to the people at the bottom..otherwise known as the people who spend their daily life in contact with the customers, where things really matter.

Whistleblowing hotlines

Whistleblowing is one of the checks and balances organisations put in place to try to keep themselves honest. Whistleblowing hotlines are mandatory under the Sarbanes-Oxley accounting rules rushed in by the US authorities after the corporate scandals (such as Enron) at the beginning of the 2000s.

Whistleblowing can of course be effective; publicising a hotline is a constant reminder of the decency at the heart of a company which can be appealed to when things go wrong.

But the need for a hotline sheds some light on the nature of organisations..the way that being "organised" detaches ordinary people from the normal responsibilities and decencies and turns them into corporate persons with loyalties mainly to their immediate superiors..the straight line relationships on the organisation chart.

Corporate "good" behaviour

Organisations replace human good behaviour with corporate good behaviour, and it is not quite the same thing.

How can the world's main banks have got engaged in such an orgy of destruction as we have seen in the past several years?
It must have been more than just stupidity.

The trend in organisations is to chop up the tasks into bits that prevent sensible questions being asked about their purpose: in the old days, banks and similar finance organisations used to find the money, arrange the mortgage and live with the loan until it was repaid, with oversight of the whole process.

Re-packaging

Then they thought they could streamline the process into component (and outsourced) parts: retailing loans, parcelling them up, selling them to investors, buying them in bulk.

In this way they held the real world at bay, created a machine, and chopped up loan arranging into such tiny pieces that overall oversight was removed from the process, along with any grounding in the real world.

Banks created a machine that disabled the oversight and the responsibility mechanism that used to be at the heart of what they did.
And nobody blew the whistle on it.

Whistleblowing is a necessary part of running a modern organisation. But organisations have to be built so that when someone blows the whistle, they know how to respond.

Contributors:

Sherron Watkins, whistleblower
Former VP of Corporate Development, Enron Corporation

Tom Devine, Legal Director Government Accountability Project (Washington)

Dr Nick Harper, Deputy Medical Director Blackpool Victoria Hospital

Guy Dehn, Founder Public Concern at Work (UK)

Carol Sargeant, Chief Risk Director, Lloyds TSB

Paul Van Buitenen, Dutch MEP

Richard Calland, Founder Open Democracy Advice Centre,