WHISTLE BLOWING

PRESENTED BY:RANJEET KAUR MBA-2ND (FINANCE) 428

James (1995), defined Whistle blowing as an attempt by an employee or former employee of an organization to disclose what he or she believes to be wrongdoings in or by the organization.
The wrongdoing might take the form of fraud, corruption or

mismanagement.

WHISTLEBLOWER
An employee who discovers corporate misconduct and chooses to bring it to the attention of others

Internal Whistle-blowing
When an employee discovers corporate misconduct and brings it to the attention of his supervisor, who then follows established procedures to address the misconduct within the organization

External Whistle-blowing
When an employee discovers corporate misconduct and chooses to bring it to the

attention of law enforcement agencies and/or the media

Ethical whistle-blowing must meet 5 conditions:

1)

When the company, through a product or decision, will cause serious and considerable harm to the public (as consumers or bystanders), or break existing laws, the employee should report the organization.

2)

When the employee identifies a serious threat of harm, he or she should report it and state his or her moral concern.

3)

When the employees immediate supervisor does not act, the employee should exhaust the internal procedures and chain of command to the board of directors

4)

The employee must have documented evidence that is convincing to a reasonable, impartial observer that his or her view of the situation is accurate, and evidence that the firms practice, product or policy

seriously threatens and puts in danger the public or product user.

5)

The employee must have valid reasons to believe that revealing the wrongdoing to the public will result in the changes necessary to remedy the situation

ETHICAL DILEMA

The Mum Effect (reluctance to blow the whistle)

Audit report may contradict the best judgment and vested interests of the powerful players
backing a project; fear of reprisals

The Deaf Effect (reluctance to hear the whistle)

I wrote lots of reports. I escalated things as much as I could, but in the end, they said, We
really appreciate your efforts, but thanks, but no thanks

The Blind Effect (reluctance to see the need to blow the whistle)

Established audit functions do not operate effectively because they try to conceal the
information from management

When is Whistle-Blowing Unethical?

Whistle-blowing

must be questioned if:

Motivation is the opportunity for financial gain or media attention

Employee is carrying out a vendetta against the company

Key point better be very sure of your facts and your evidence better be irrefutable before blowing the whistle

The Telgi Scam In Maharashtra

Jayaraman Pondicherry University Case Gir National Forest Park(2010)

Indian Oil Corporation Scam (2005)

Percentage of whistleblowers who felt / experienced an overall negative effect as a result of their whistle blowing :

Percentage of whistleblowers who felt / experienced an overall positive effect as a result of their whistle blowing :

51% of govt. employees lost their job 82% harassed by superior 69% watched closely after blowing the whistle

20% felt their actions resulted in positive changes

More than 50% (of responders) would do it again

STATISTICS FOR PERSPECTIVE 63% lost job responsibilities

60% fired 10% attempted suicide

Creating a Policy about reporting illegal or unethical practices

Getting endorsement from top management

Publicizing the Organizations Commitment

Investigating & Following up

Assessing the Organizations Internal Whistle blowing System

Whistleblower Protection Act

STAGE DATE

Introduction Standing Committee referral Standing Committee report

August 26,2010 September 16, 2010

June 9, 2011

Lok Sabha

Passed on 27 December 2011 Passed on 21 February 2014

Rajya Sabha

The Bill seeks to protect whistleblowers, i.e. persons making a public interest disclosure related to an act of corruption, misuse of power, or criminal offence by a public servant.

Any public servant or any other person including a non-governmental organization may make such a disclosure to the Central or State Vigilance Commission.

Every complaint has to include the identity of the complainant. The Vigilance Commission shall not disclose the identity of the complainant except to the head of the department if he deems it necessary. The Bill penalizes

HIGHLIGHTS OF THE BILL The Bill prescribes penalties for knowingly making false complaints.

any person who has disclosed the identity of the complainant.

Satyendra Dubey A 31 year old IIT Kanpur Civil Engineering graduate. Employee of National Highways Authority of India. Assigned Prime Ministers pet project The Golden Quadrilateral, to connect the four corners of India.

Was posted at Koderma, Jharkhand as project director he would be in charge of releasing funds for an extensive swathe of the underconstruction highway.

Sloppy project reports

Contracts awarded on basis of forged documents Huge advances doled out to contractors Rampant subletting to petty contractors who lacked the technical ability to work on this mega-project(Dubey discovered that the contracted firm, Larsen & Toubro, had been subcontracting the actual work to smaller low-technology groups, controlled by the local mafia).

Everyone from Govt. engineers to MNC construction companies to local thugs seemed involved in LOOT OF PUBLIC MONEY

Findings in the Golden Quadrilateral Project

What did Dubey do?

Wrote a letter to his boss, NHAI Project Director SK

Soni, and to Brig Satish Kapoor, engineer overlooking the supervision, there was no action.

Wrote a letter to the PM Dubey also sent the same letter to the chairman of NHAI.

Mr. Dubey anticipated trouble and wrote a second letter,

again requesting anonymity but was ignored.

o
o

The PMO didnt bother either to investigate

For in an act of murderous negligence, the PMO handed over both the letter and the sheet with Satyendras particulars to the Ministry of Road Transport and Highways.

In 2003, Dubey was found dead in

Gaya Whistle Blowing Murder

At least eight officials scanned it before passing it on to the National Highway Authority of India.

The Blind/ Deaf Effect