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Blog : BOARD TALK

Whistleblowers: Does The UK Know What It Thinks?

Posted on August 1, 2014 at 5:10 PM

As a nation, we appear still to be trying to work out how exactly we feel about whistleblowers.


According to the Financial Conduct Authority (FCA), the definition of whistleblowing is "when an employee raises a concern about a breach of regulation, an illegal act or dangerous activity that they become aware of through their work."

 

The regulator goes on to say: "Whistleblowing is relevant and applies to all organisations and people. When a firm breaches regulation or commits a crime, the first people to have concerns are usually those who work in or with the organisation."


The FCA has just publlished its report on Financial Incentives For Whistleblowers.  Its key points after researching the use of incentives in the US are: 

 a. Incentives in the US benefit only the small number whose information leads directly to successful enforcement action resulting in the imposition of fines (from which the incentives are paid). They provide nothing for the vast majority of whistleblowers.

b. There is as yet no empirical evidence of incentives leading to an increase in the number or quality of disclosures received by the regulators.

c. Introducing incentives has been accompanied by a complex, and therefore costly, governance structure.

d. The incentives system has also generated significant legal fees for both whistleblowers and firms, although many whistleblowers are represented on a contingency basis (no award, no fee).

e. Incentives offered by regulators could undermine the introduction and maintenance by firms of effective internal whistleblowing mechanisms, which both the regulators and the Parliamentary Commission on Banking Standards (PCBS) want to see.


So far, so good. This seems eminently sensible to me - paying people for whistleblowing has always felt wrong, as far as I am concerned. There should ideally be no money involved in that ethical choice.


But it is undeniable that here needs to be support and protection for the whistleblower, who performs a critical function in coming forward. And this is where we don't quite seem to have thought things all the way through. 


Only today, a group of MPs has said that the treatment of employees in public services who have raised concerns about wrongdoing has been "shocking." According to the BBC, The Commons Public Accounts Committee said whistleblowers had often been subjected to bullying and harassment. Its report called for whistleblowers to be offered legal and counselling help and for "swift sanctions" to be imposed on staff who victimised them.


And that's the public sector. God help the whistleblower in the private sector. The Commons Public Accounts Committee found  a "startling disconnect" between policies encouraging whistleblowers in theory and what happened in practice.


That is a critical disconnect that makes one wonder: how do you support properly, if you don't offer financial incentives?


If you want to post a guest blog on this, email me - dinamedland1@gmail.com.

 

 


Categories: Scrutiny, Behaviour, Ethics