Holding the line, speaking up and whistleblowing
We have provided a number of historical examples of successful whistleblowing here. The list of cases includes individuals who were extremely brave and who succeeded in exposing, and halting, substantial wrongdoing. They were, in many cases, recognized for what they did, and are sometimes referred to as heroes. What, then, makes this a difficult topic?
It is important to stress the selective nature of the list. What are not included are the many cases of people raising concerns where initial suspicions were not ultimately borne out. There are also cases where people made unsubstantiated accusations for improper purposes. Even in the more positive cases we have referenced, the experience of standing tall often took a very large toll on the individuals concerned (and those around them).
"Whistleblowing", "speaking up" or "holding the line" in the professional context is a difficult topic for a number of reasons. Some of the key reasons are summarised under the following general headings:
Conflicting duties are most evident in the employment context. An employee owes duties to co-workers, to superiors, to his/her employer more generally and to clients. At the same time CFA Charterholders owe duties to uphold the Code of Ethics and Standards of Professional Conduct, and we all owe both moral and legal duties as members of society. Generally these duties will support each other, but in some cases (and most specifically in the sorts of cases we are concerned with here) they can actually come into conflict. It may be very difficult to know how to proceed in such circumstances.
"This should keep John quiet", the CFO says to her PA as she hands over a small satchel. Hearing this may raise suspicion. If there is cash in the satchel destined to line the pockets of an inquisitive (but corrupt) auditor that suspicion would be well-founded. If, however, there is an iPad loaded with games, destined for a young child who is sitting (less than entirely patiently) in the next room then our initial concerns would be unfounded.
In our professional lives we are often not able to see the whole picture. We are privy to only some of the facts. This is especially true when we are not the central controller/coordinator, but are rather fulfilling a more specialised role. We may inquire when our suspicions are raised. It may, however, be inappropriate that we should know everything. Imagine that we asked the CFO about the satchel (in the example above). The response, "there is no need for you to worry about that", may exacerbate concerns. But what if the satchel contains a contract for John, a co-worker, providing a substantial pay rise? That is our employer’s prerogative, and would generally be none of our business.
The problem of who can and should judge in professional contexts is a thorny one. Employees who see something that they feel may not be right have the difficult task of trying to determine what they need to know to decide their own correct course of action. They must try to obtain this information without gaining access to information which it would be inappropriate for them to access.
Adding to the difficulties already identified, where initial suspicions are justified, it may well be that someone else is knowingly acting in an inappropriate manner. That person is likely to start with a substantial informational advantage and may well use this to defend his or her position. Such imbalances are likely to be especially pronounced when the malefactor is a manager or coordinator.
Employees are, in meaningful ways, dependent on their employers. Much of an employee’s material and emotional well-being can be tied up in employment (and career more generally). Employees often deeply value the social aspects of employment. Being accepted by, and integrated into, a work team is for many a key part of the affirmation and support that employment provides. An employee’s family will also often be dependent on the professional success of a "breadwinner". This will generally place additional pressure on an employee. All this can be put in jeopardy when an individual finds themselves exposed to a potential breach of basic duties by others in the professional context. Most people would prefer to do the right thing. The pressure to either turn a blind eye, or to actively participate can, however, prove very strong given the high stakes. The distress felt by an employee who is being put upon will generally be far more serious than that felt by a large firm when it dismisses (or freezes out) an employee.
The potential damage to an individual faced with a moral dilemma in a professional context can be great, and his/her power will often be relatively constrained. This obviously increases the likelihood that an employee may not stand up to pressure to bend ethical standards. Concerns are magnified when one considers the likely reaction of a potential wrongdoer and his or her relative strength. As noted in the examples provided earlier, those convicted of fraud or other crimes often not only lose their employment but also their reputation and their freedom. The reaction of people confronted with an accusation of personal or collective wrongdoing is likely to be somewhere between strong and extreme. The person concerned may be a superior with substantial power, or the circumstances may implicate a group of people, with both numbers and power on their side. Not uncommonly the reaction will be an attempt to comprehensively discredit a person raising awkward questions.
In our professional lives it is not uncommon for us to find ourselves in competition, or even conflict, with others. Indeed we are encouraged to take the position of adversary/competitor in many cases. Such relations may lead our motives to be questioned when an ethical concern is raised. Are we exaggerating something to "get back at" or discredit someone, or are the concerns valid? Even if the concerns are valid, a complaint brought with mixed motives can appear tainted (and receive a less favourable hearing as a consequence).
An example of the problems under consideration here may have occurred in the Madoff case, referred to above. When Harry Markopolos took his concerns to the New York Office of the SEC he was questioned about his former employer’s competitive relationship with Madoff. The fact that his employer had been a competitor may have tainted his approach in the eyes of those considering Markopolos’ concerns.
Obviously where the key relationship is that between manager and subordinate suspicions will be exacerbated. Where an employee is dismissed and he or she claims to have uncovered wrongdoing a polarisation often occurs in the perspectives adopted by third parties. Some tend to assume that a disgruntled former employee is merely trying to exact revenge on an employer. Others more readily suspect the employer of trying to discredit a brave employee who had discovered malfeasance. There are, of course, other possible interpretations, but our minds typically seek out the extremes at the end of the spectrum.
If your concern relates to the interests of others, we recommend reviewing the Actuaries Whistleblowing Guide. CFA UK will be developing a full guide to whistleblowing, but in the meantime, we consider this guide a helpful starting point. Its guidance should only be followed where members independently conclude that the pointers provided are both relevant to and appropriate for their situation.
The discussion in this introduction is not designed to determine who is right in any particular case. It cannot by itself answer the questions that someone with an ethical dilemma at work may well have. What it can do, however, is to provide some context, perspective and comparative guidance for a potential whistleblower. It can also prompt the asking, and answering, of helpful questions.
Examples might include:
These are just some of the initial questions that may be asked, taking into account the contextual realities that make whistleblowing a difficult topic. As a first step we suggest taking the time to write out all the salient facts, as you see them. Try to put yourself in the shoes of all the people involved. Understand as best you can where each person is coming from and why they are acting in the way they are acting. Consider carefully whether the concern you have is one that involves primarily your personal interest, or whether it imports questions of a broader organisational, industry-wide or general social interest.
In time CFA UK will be developing further guidance for our members. For now we hope very much that this context setting will be useful. We have also added some basic resources and materials here which will help members decide on the next steps once initial questions such as these have been asked and answered.
Whistleblowing is a very important, but often also a rather difficult activity. We explore some of the reasons for the difficulty whistleblowing engenders in the 'Why is this such a difficult topic?' section above.
If you feel that you may be in a position where compromises are being demanded of your professionalism and after carefully considering all the circumstances, you feel that you are in a position where you might need to speak up, hold the line or blow the whistle, please visit the 'Where can I obtain further assistance?' section above.
We hope very much these materials will prove helpful. We hope to upgrade the material here over time.
If you have suggestions for improvements we would be very keen to hear from you. Please do not hesitate to email us on firstname.lastname@example.org.
This information on Holding the Line, Speaking Up and Whistleblowing is not meant as a substitute for proper legal advice and no reliance should be placed upon it other than as general guidance. We have signposted in this introduction where you might find sources which set out your legal rights in detail.