Whistleblowing: An Analogy

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By Ralph Lake.
Managing Director, Contingent Events.

Without a proper understanding of what whistleblowing is, organisations will struggle to develop effective whistleblowing policies.

Perhaps unsurprisingly there are a number of varying definitions of whistleblowing throughout the literature. A whistleblower has been likened to that of ‘… an official on a playing field, such as a football referee, who can blow the whistle to stop action’ or ‘a police officer blowing his whistle to stop some action due to the observation of some type of rule or law infraction’.  Similarly it has been described as someone who sounds the alarm but from within the organisation they work.

It has been postulated that whistleblowing is the disclosure of ‘illegal, immoral or illegitimate practices’ by members of an organisation to those that may be able to take action).  The term has widely been defined as ‘an act of a man or a woman who being in the public interest overrides the interest of the organisation he serves and publically blows the whistle if the organisation is involved in corrupt, illegal, fraudulent or harmful activity’.  A wider term coined by the Australian Senate Select Committee on Public Interest Whistleblowing on public sector matters is:

… a concerned citizen, totally or predominately motivated by notions of public interest, who initiates of his or her own free will, an open disclosure about significant wrongdoing directly perceived in a particular occupational role, to a person or agency capable of investigating the complaint and facilitating the correction of wrongdoing.

 Despite a lack of common ground on a definition within the literature, there is agreement on the term comprising the following four components:

  • An individual acts with the intention of making information public;
  • Information is conveyed to parties outside the organisation who make it public and a part of the public record;
  • The information has to do with possible or actual nontrivial wrongdoing in an organisation; and
  • The person exposing the agency is not a journalist or ordinary citizen, but a member or former member of the organisation.

The key difference with this definition is that it includes the concept of conveying the information to parties outside the organisation to make it public.  The definition also excludes those whistleblowers who suffer reprisals, even when they report internally and as a consequence this definition is much narrower than other definitions proffered.

 Within Australia the corporate regulators have also defined whistleblowing and some divergence has emerged between them.  The Australian Securities and Investments Commission (ASIC) views it as ‘someone who alerts the authorities to misconduct from within an organisation’ while the Australian Competition and Consumer Commission (ACCC) regard it to be a ‘truthful disclosure of conduct which amounts or could amount to breaches of rules of professional conduct, and breaches of the civil law as well as to conduct which could amount to a criminal offence.’

The definition of whistleblowing being ‘a disclosure by organisational members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organisations that may be able to effect action’ is perhaps the most well referenced within the relevant literature.

While most of the literature approaches the definition from the basis that the whistleblower is a current or former employee of an organisation, there are some cases that are characterised as whistleblowing despite not meeting the strict definition.  One most recent and very public example is that of Mr Harry Markopolos who blew the whistle to the United States Securities and Investments Commission on the money making methods of Mr Bernard Madoff’s now infamous Ponzi scheme (a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation).

Mr Markopolos is an independent financial fraud investigator who was freelancing himself by working for institutional investors and had not himself worked for Mr Madoff when he blew the whistle on the scheme. It is nonetheless seen and reported as a whistleblowing event.

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