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Whistle-Blowing Ronald F. White, Ph.D. Professor of Philosophy College of Mount St. Joseph.

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Presentation on theme: "Whistle-Blowing Ronald F. White, Ph.D. Professor of Philosophy College of Mount St. Joseph."— Presentation transcript:

1 Whistle-Blowing Ronald F. White, Ph.D. Professor of Philosophy College of Mount St. Joseph

2 What is Whistle-Blowing? “The term whistle-blower was initially used to describe government employees who went public with complaints of corruption or mismanagement but it is now applied to employees in the private sector as well. Whistle-blowing is ethically problematic because it involves a conflict between an employee’s obligation to his or her company and a general obligation to the public. Employees are required not only to do the work they are assigned but also to be loyal to their employer, preserve the confidentiality of company information, and work in the best interest of the company. Deciding when whistle-blowing is morally justified and when it is not requires a balancing of many different obligations.” From: John Boatright, The Ethical Conduct of Business

3 Why is it morally problematic? Conflict of interest – Loyalty to employer Moral Legal (contractual) – Utility – Beneficence – Nonmaleficence Harm to others Harm to self – Liberty – Justice Abuse of whistle-blowing by Whistle-Blowers Retaliation by Stakeholders Utility Role of Government Misinformation by Whistle-Blowers

4 Conflict of Interest and Obligation Conflict of Interest – Employees interests – Employer interests – Social interests Conflict of Obligation – Employee Obligations Self and Family Employer Society – Employer Obligations Stakeholders (stockholders, employees, suppliers etc..) Employee

5 Loyalty Loyalty as a moral obligation – Agency Problem – Employee to employer – Employer to employee – Other Stakeholders Loyalty as a legal obligation – Contractual obligations

6 Utility Whistle-Blowing and Harm – Degree of harm being reported – Degree of harm resulting from whistle-blowing

7 Beneficence Advance the most important interests of others and remove harms – Whose interests are at stake?

8 Non-maleficence Do no harm – Harm of act being reported – Harm of Whistle-blowing Stockholders Employees Consumers Suppliers Financiers Local Community

9 Liberty Liberty of Employee – Right to free speech Liberty of Employer – To conduct business as it sees fit Liberty of other employees to retaliate.

10 Justice Treat equals equally and unequals unequally. – Justice in distribution – Justice in retribution

11 Criteria for Whistle-Blowing A whistle-blower is a member or former member of an organization and not an outsider. The information that is revealed by the whistle-blower is non-public information and not already-known facts. The information concerns some significant misconduct by the organization or some of its members. The information is revealed outside of the normal channels of corporate communication within an organization. The information is revealed voluntarily and not by a legal mandate. The information is revealed as a moral protest in order to correct some perceived wrong.

12 Conditions for Whistle-blowing Is the situation of sufficient moral importance to justify whistle-blowing? How serious is the potential harm compared to the possible benefits? To what extent is the harm a predictable and direct result of the protested activity? How imminent is the harm? Do you have all the facts and have you properly understood their significance? Whistle-blowers must support allegations with adequate evidence and not draw conclusions about matters beyond their expertise. Have all internal channels and steps short of whistle-blowing been exhausted? Most organizations require employees to address concerns with an immediate superior or through internal channels of communication. What is the best way to blow the whistle? To whom should the information be revealed? How much information should be revealed? Blowing the whistle in a responsible manner avoids charges of being merely a disgruntled employee. What is my responsibility in view of my role within the organization? An employee’s position in the organization may increase or decrease an obligation to blow the whistle. What are the chances for success? An employee should only blow the whistle when there is a reasonable chance to achieve some public good.

13 Components of a Whistle-Blowing Policy An effectively communicated statement of responsibility. A clearly-defined procedure for reporting. Trained personnel to receive and investigate reports. A commitment to take appropriate action. A guarantee against retaliation.

14 Stockholder Theory Approach Free Market Approach Liberty – Whistle-blower – Corporation Minimal role of government – Whistle-Blowing is a private matter – Law punishes corporate wrong-doing – Law punishes fraud and employment contractual violations Whistle-Blowing Policy – Employer/employee contractual negotiations Result: The free market will punish ill-advised whistle- blowing and ill-advised retaliation by employers.

15 Stakeholder Theory Approach Corporations are persons and have both moral and legal obligations. Categorical Imperative – Treat Persons as Ends not Means – Truth-Telling Whistle-Blowing Policy – A public matter requires government oversight Arguments in Favor of Legality

16 Existing Legal Protections The Civil Service Reform Act of 1978 prohibits retaliation against federal employees who report waste and corruption in government. The Merit System Protection Board was set up by this act to receive and act on complaints of retaliation. The Whistle-Blower Protection Act of 1989 further strengthened this protection with the creation of the Office of Special Counsel for processing whistle-blower reports. Anti-retaliation provisions in various pieces of federal legislation protect whistle-blowers in both the private and public sectors, and some statutes even encourage whistle-blowing in fraud cases by awarding a percentage of the funds recovered. More than 35 states have laws that protect whistle-blowers (although most of these apply only to government employees), and many state courts are limiting the grounds on which employees may be fired.

17 Is there a duty to whistle-Blow? Is whistle-blowing “above and beyond the call of duty? – Risk of retaliation by stakeholders Is retaliation by stakeholders morally justified?

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