In the absence of evidence, you become the key evidence and your competence and qualification may be questioned
Have a systematic plan in place if you are going to blow the whistle says L. Gurunathan
There is no straight answer to whether a whistle-blowing policy can actually solve ethical crises. Then it is not surprising that organisations across the world have been reluctant to have a policy on whistle-blowers as the underlying belief is that we could have solved the issue internally and gotten out of it. But, no organisation or individual corrects its course unless they are shaken out of it. And it is a human thing.
We may never tend to realise that we are wrong till the time things are working for us. The spate of corporate scandals across the world is a glaring evidence for the fact that unless you have the right sanctioning mechanisms in place, the situation is not going to improve. The situation is slightly better in the US and Europe where the legal framework is better compared to India, where there is hardly any law, except that a bill was passed. However, no country in the world is ready yet to face the issue.
Short term vs Long term: The never ending tussle
Business is about the never ending battle of benefits: Long term vs short term. When you are focused on the short term, ends become more important than the means and then you tend to resort to seemingly wrong practices. Depending on what level you are, the practices may be different. For example, a sales manager might fudge numbers and a business head may have unholy alliances and so on. This is true for businesses across the world. Even if the practices may be detrimental to the society as happened in the WorldCom or the Enron, the immediate focus is on money.
The idea that businesses are meant to make money, a subtle but persistent value bias consistently plays out in almost all business processes where every decision is approached from the perspective of the impact it has on the bottom line. Any theory irrespective of what it is concerned with must first and foremost be justified on the basis of whether it is profitable for the firm and not on the basis of whether it is good for the individual or the society.
Also the definition of right and wrong changes as per the context one operates in. For instance, exchange of gifts to get business is a prevalent practice in all Eastern countries, including India and China and considered legitimate. However, it is an illegal practice in the Western cultures. Another example is that of high context cultures and family-owned organisations, where the hierarchies and family systems are stronger. People believe that if you have a problem in the family, you should discuss it within the family and not take it out in the open. The day you do that, you are no longer a part of the family. This cultural factor percolates to organisations as well. Third is the importance of hierarchies -- people tend to have immense respect for their seniors and speaking out against them is out of question. MNCs try to enforce a uniform culture by enforcing uniform policies across the globe, but it is culture thing and cultures don’t change overnight. Things will take long to fall in line.
Given this persistent focus on the bottom line, quarter-to-quarter results and the ever changing and conflicting cultural norms, the end dominates the means. In such a scenario, how does one define public interest and who gets to define it?
However, I believe that the situation is going to get better. Let’s take the most recent example of Ranbaxy. Thanks to them, the entire India drug industry is under suspicion. Even other industries, directly or indirectly related, are realising that resorting to unethical practices may yield results in the short term but can negatively impact the bottom line and the brand in the long term. Sooner or later people will realise and in fact they are realising that sustainable businesses that give value to shareholders and the society can be built only on high standards of corporate ethics and governance.
Coming back to whistle-blowing: The presence of a policy may seem to cause a lot of pain for the organisation in the short term. However, in the long term it is beneficial for the organisation. Firstly, it keeps a check on everyone in the organisation including the CEO and the board as people have a mechanism to report even if the top management is involved in practices that may impact the interests of the organisation and its shareholders. Secondly, the presence of a policy also enables the CEO to learn about practices that the people might be indulging and he might not be aware of.
Culture and Policy: It takes two to tango
We often say that if an organisation has a culture where people actually speak up we do not need a policy. People, especially the top management, tend to believe that they have created an open culture, but no one knows the reality until it is put to test. Unless you have a policy, the right framework that defines the reporting mechanisms, assures protection against retaliation, you don’t really know the truth.
Let me give an example of Olympus, where the CEO, Michael Woodford himself became the whistle-blower and eventually got fired. While he had been brought in to clean the system, he realised that the problem was deeper and a case of systemic mismanagement. He ended up creating more ‘problems’ for the organisation than those he could actually solve. Japanese organisations are widely believed to have a culture of trust, where organisational health is more important than individual health, however in the case of Olympus, the culture was not enough.
The point is that unless you put these things to test you never really know whether you actually have a culture as robust as people tend to believe. This is why you need comprehensive whistle-blower policy legally framed that protects whistleblowers because unless the policy is in place you may not even know if you have an open culture or not. The system unfortunately prevails here.
While the system is indispensible and is the litmus test of the culture, any system may actually fail if the culture does not support it. While a policy sets the ground rules, it is the culture that actually enables people to act upon it. Research has proven that unless employees trust the organisation and its leaders, they might not actually decide to take the plunge. So you may have a robust policy in place, however if employees don’t believe in the leadership, policies may indeed fail.
India is a classic case, where there is hardly any history for whistle-blowing. One the state itself doesn’t have a legal framework to start with. Secondly, people don’t have faith in the system, the government, the board, the management or anyone for that matter. There is a feeling of paralysis because people don’t know whom to talk to, they feel everyone is involved and want the show to go on. Whenever I talk to anyone in any organisation they say, whom will you talk to, everyone is involved, they want the show to go on. For example in the Satyam case, everyone asks, why didn’t the board know, they could have checked.
So to create a transparent, ethical organisation, where people can question when in doubt, one, you need to have robust systems in place, and two the leadership needs to consciously build that faith in the behaviour of the organisation. Both culture and policies complement each other and one may fail without the other.
Defining the policy
While the idea of whistle-blowing is in a nascent stage across the world and policies will evolve as we go along, there are a few basic things that we have to keep in mind. And those basics are answered by the two questions – why do we need a policy and what all should it address. These policy frameworks are more or less the same across sectors, complexities around it may vary.
So catering to the first point, the policy should define in detail the channels of reporting and escalation. Who is the right person to talk to and for what kind of issue? Second, it should define the sanctioning mechanisms and assure zero retaliation towards the whistle-blower. Third, the investigation process and mechanism should be defined.
There has to be an added clause to maintain, confidentiality and anonymity for the interest of the whistle-blower, the perpetrator and the victim. Having the right framework in place enables companies to solve issues when they are small enough to handle, in most cases it can be solved internally and safeguards the company against misuse of the policy as well.
You the whistleblower!
History, observation and anecdotal evidence prove that there is a difference between those who take up the gauntlet and those who don’t. People who speak up, who talk and feel about issues are a little different than those who don’t. Being able to speak up against something needs an attitude which not everyone has; in some of them you see a stronger conviction. If they believe that what they are doing is right, they might not stop, irrespective of circumstances. What others see as a cost, they might see as a necessary price to pay and for them their conscience being clear might be a better reward than anything else. By the sheer tendency to hold on to principles, these people are more likely to be whistle-blowers.
People often ask if there is a minimum qualifying criteria to be a whistle-blower. In writing, there is actually no criterion - qualification is not important, intent is. Even an external consultant or a new joiner can become a whistle-blower. And in fact they tend to see things which others in the organisation might have accepted as a practice. Having said that, there are certain factors that have to be kept in mind:
First and foremost, follow the system. If there are defined reporting channels, use them. Second, gather as much evidence as you can, third find a trusted mentor, a confidante in the system with whom you can discuss the issue and who prepares you about the what-ifs before it gets blown out of proportion, and ensure that you keep that person in loop through all stages. Lastly, be aware of the fact that when you have evidence the evidence takes precedence.
However in the absence of evidence, where you are using your observation as evidence, you yourself become the key evidence and in that case your qualification and competence might become a question. Also, if the complain requires technical know-how, you need to have a basic qualification to be a whistle-blower. For example, in the case of a R&D lab of a pharmaceutical industry, you need to be at least a junior scientist to tell that the records are being faked.
That’s about the process part. Now be ready to face the softer issues and the long-term repercussions. Accept that, going forward you may no longer be part of the ingroup, people may find it difficult to trust you. They might find you to principled. You may be overlooked for a few positions and you may even want to quit your current organisation. And even quitting might not solve the problem because s/he will be identified with what they did no matter where they go. This should not prevent you but accept it as a part of the process. And it is not just with whistle-blowing, anything either good or bad will stay with you for long.
L. Gurunathan, Professor of Human Resource Management and Industrial Relations, XLRI Jamshedpur