October 2, 2023
Few things are as important to a company as a team of people who work with dedication and actually care about the company's success and well-being. That's why it's important to have a strong culture of internal reporting, also known as “whistleblowing.”
This idea can sometimes (and especially in certain organizations and industries) be difficult to sell, both to managers and to the rest of the staff. People tend to be afraid of whistleblowing, as reports from whistleblowers mean problems. Every report is a potential concern that needs to be investigated, and serious allegations of wrongdoing can cause a lot of trouble for the business. Right? Wrong.
This way of thinking about whistleblowing is very wrong, and eventually, it can cause more difficulties for an organization than any whistleblower could have done. In fact, whistleblowing provides opportunities to resolve issues to become the best organization possible. For example, a 2022 study by ACFE shows that the average fraud lasts 12 months, which can be shortened significantly with effective whistleblowing procedures.
How whistleblowing affects relationships between colleagues
When someone blows the whistle, employers often put themselves in a very defensive position. When important information gets out to the public, it can cause everything from public embarrassment to serious issues for the entire company, all the way to the company's bankruptcy.
Whistleblowing regularly introduces new compliance and control standards that were not there before. It makes the organization work better, which is why it is essential to make whistleblowing something everyone has the courage to use.
In a perfect world, no one would break the rules, and we would all work hard to get the job done with the highest ethics and professionalism. But that is not always the case. For example, 17 percent of employees may consider acting immorally to get a faster promotion or reach a higher salary.
When a sudden “breach of trust” from an anonymous source, which could be the person sitting next to you, puts jobs and livelihoods at risk, employees are sometimes put on the defensive. When someone blows the whistle, it can lead to people stopping talking to each other on the spot, the workplace becomes tense and relationships between people often end. The workplace can become more like a machine that continues to produce results that slowly get worse and worse, without discussions between colleagues.
This, of course, depends on the nature of the matter raised, but it is not entirely uncommon for the tone of the workplace to change in connection with whistleblowing. Especially if it is of such a serious nature that it could lead to the risk of closing down the entire organization down.
It's a dystopian picture that we're painting, and we're doing it to illustrate how many companies view whistleblowing. This picture is entirely wrong and often leads to a resistance to whistleblowing in general – something that just turns a blind eye to problems and does not solve or address them.
How whistleblowing affects managers
Frontline managers usually become stricter about information, and they may not share more information with their employees than is absolutely necessary because they cannot take the risk. Eventually, workers who take this defensive position begin to chafe under these tight chains and are frequently very unhappy.
With this comes more conflict, which can lead to mass redundancies and a general feeling of malaise in the company that has been criticized and whose culture has changed to make it a less pleasant place to work.
It is not entirely unusual for managers to step on their toes after a whistle-blower case is opened. Either out of fear of saying or doing the wrong thing, or simply because you would rather not influence the outcome of the ongoing investigation. Although, the best thing is to continue to conduct the business according to the rules, laws, and policies that apply.
How to prepare for employee whistleblower cases
A common misconception about internal whistleblowers is that true whistleblowers are senior level employees who have detailed and written evidence of their compliance issues. Although there are such whistleblowers, it is wrong to think that it applies to all whistleblowers.
In fact, whistleblowers can come from anywhere inside or outside your organization. It can be a person who has been employed for over 40 years, or a supplier who has spent less than 2 hours within the organization's walls.
Another misconception is that credible whistleblowers always back up their compliance concerns with evidence. In reality, many internal whistleblowers are focused on doing their job and don't have the time or training to gather evidence. It is best to let the professionals within compliance, HR and legal manage the investigations.
Managers working with employees should be trained not to discount the credibility of an internal whistleblower simply because they have no evidence to back up their claims or because their report appears to lack certain information. Even a “half-baked” report on a compliance issue can provide the information needed to launch a proper compliance investigation and improve the organization.
Reporting employees for possible wrongdoing takes courage and should be seen as a sign of loyalty to the company. Yet internal whistleblowers are often asked why they did what they did, receive criticism from their co-workers, and risk their reputations and jobs. For this, we have created the text 4 things to think about before blowing the whistle, so that you as a whistleblower will know how best to prepare.
In addition to developing and enforcing clear anti-retaliation policies, organizations should educate line managers on the issues internal whistleblowers face and how to respond to whistleblowers or employees who say or show fear of retaliation.
When whistleblowers report wrongdoing to their bosses, they are usually looking for reassurance that they did the right thing and recognition for their courage. When managers are educated about the issues internal whistleblowers face, they are better able to help someone who comes to them with a workplace concern.
Whistleblowing strengthens all parts of the organization
If whistleblowing is taken seriously, handled properly and actually enabled from the outset, it can make a big positive difference to the organization.
For example: A typical organization loses 5% of its revenue to fraud, but with an effective whistleblowing function, fraud can be reduced by 50%, which indirectly means that an organization can save 2.5% of its revenue, just by encouraging and enabling whistleblowing.
However, whistleblowing is not only about financial aspects, but also, as we have partly covered, social aspects, risk management and “brand protection”. There is thus much to gain from whistleblowing, both for employees and managers, but also for the organization and society at large.