Andrea Bather: Closing the door on whistleblowing

If you are thinking of whistleblowing, it's best done with windows and doors closed. Whistleblowing is risky and complex. It can have devastating effects on both the blower and the business being blown at.

New Zealand has the Protected Disclosures Act to protect whistleblowers in the public service but the private sector is not bound by it.

Evidence shows that whistleblowers suffer, often harshly, for doing what is arguably a social good; they're sometimes victimised and sometimes they lose their jobs. And yet, despite knowing the possible consequences, people still do it.

There was an incident recently with a former employee of Housing NZ blowing the whistle on an accounting "scandal" which is resulting in a Select Committee enquiry by the Office of the Auditor General.

More than one bank has also been exposed by employees for being asked to push products that might be unsuitable for some customers. These are employment related issues and there will always be some tension between employment law and public disclosure. Westpac Bank workers had let their bosses know they were unhappy before they went public, and the matter was eventually settled, but evidence suggests that people only go outside if nothing is done internally.

If organisations had structures in place that allow for internal whistleblowing there would be few occasions for matters having to be exposed 'out of house'.

Internal exposure allows organisations a chance to 'fix' problems before they develop into full-blown scandals. It also allows the organisation to check whether or not the whistleblower is genuine or is merely a disgruntled or malevolent employee attempting to disclose for personal gain.

Unfortunately there is evidence that an enlightened attitude to internal whistleblowing is not widespread. Clearly, in certain instances, organisational misconduct will be so severe and pose too immediate a threat to society for internal policies to be exhausted. Even where managers believe they have supportive systems in place, it is possible that external whistleblowing may occur. Management must be alert to this and provide systems that minimise the risks.

* Have a code of ethics that sets the ground rules, and provide continuous training on how to deal with ethical dilemmas;

* Inform staff of steps required in communicating ethical concerns;

* Give employees confidence that their concerns will be taken seriously and investigated;

* Give employees the confidence to know that they will not suffer personal reprisals for using internal channels to report perceived wrongdoing; and

* Have an "ethics safety net" whereby employees' ethical concerns, if necessary, can circumvent the chain of command, and be dealt with by an impartial organisational body.

Although, in some cases, the moral courage of whistleblowers will be admirable, the world would be a better place if the need for external whistleblowing were to disappear.

The adoption of a corporate social responsibility perspective by senior managers in the 21st century should lead to the demise of whistleblowing.

* Andrea Bather is a Senior Tutor in Commercial Law at Waikato Management School, Waikato University.