WHISTLE BLOWING AND CORPORATE COMPLIANCE

Whistle blowing is a symptom of communication problems within an organization which results from fear characterized by suppression of truth, absence of an appeal system, a history of victimization of those who expose wrong doing, unfair labour practices, and existence of concealed immoral or criminal activities.

Consequently, whistle blowing is merely a protest by those who believe or feel they must do something to correct or arrest the situation.

The term refers to the process of informing the public, government agencies and other agencies about fraudulent, unethical and improper practices committed by individuals or organizations.

A whistle blower is a slang term that is now generally used in practice to describe a person that alerts civil authorities of wrongful acts being committed by his employer against the government.

Having a whistle blowing policy is beneficial because it cultivates an anti-corruption spirit and begins a culture of corporate compliance. Organizations must create transparencies and improve communication. Organizations are advised to follow the Sarbanes& Oxley guidelines as an anti-corruption strategy.

Sarbanes-Oxley is a United States law passed in 2002 to strengthen corporate governance and restore investor confidence. Act was sponsored by US Senator Paul Sarbanes and US Representative Michael Oxley hence the name Sarbanes-Oxley. 

Sarbanes-Oxley law passed in response to a number of major corporate and accounting scandals involving prominent companies in the United States. These scandals resulted in a loss of public trust in accounting and reporting practices. 

A whistle blowing policy maximizes the chance of the company becoming aware of (and controlling) problems before they reach the public and the regulators. 

It makes individual employees at all levels feel that their opinions are respected. If there is a whistle blowing policy the element of fear of reporting corrupt leaders ineffective and or corrupt Head of Internal Audit is destroyed.

Reporting to bosses on the crimes or corruption by their own relations where there is nepotism can be difficult. Proponents may be subject to threats and repercussions from those affected may include physical harm, isolation or not getting promoted. At times unexplained release or acquittal of the accused. However, where there is a whistle blowing policy both the employer and the employees can be protected.

It can identify problems and allow them to be addressed before they escalate to organization-threatening proportions. For instance if someone’s health and safety is in danger, damage to the environment, a criminal offence, if the company is not obeying the law or if someone is covering a wrong doing, such issues can be dealt with before reporters can publish them.

A whistle blowing policy prevents defrauders and safeguards corporate assets. This is because there are evil some minded people who use whistle blowing for extortion or personal gain, even though most of them do it for the benefit of the society as a whole. 

Before taking part in whistle blowing one should consider if the wrong occurred, if the action of reporting is required, are they responsible for acting, if the action will be beneficial and if the benefits will outweigh the costs.

Ethical considerations should be taken before whistle blowing. Proponents should follow proper reporting procedures follow persisting disregard of warning signals stem from moral and ethical motives. 

It is therefore important to always aim to protect potential victims, to be factual and true, prevent national disasters and to be supported by verifiable facts before whistle blowing.

One should check their employment contract or ask human resources or personnel if their company has a whistle-blowing procedure. If they feel they can, they should contact their employer about the issue they want to report if they cannot tell their employer, they should contact a prescribed person or body.

Image: Unsplash

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