Ethics and the conduct of business 8th by john boatright and smith 2017 chapter 4

Learning Objectives• 4.1: Define the significance of whistle-blowing and the act itself according to seven criteria • 4.2: Assess situations where whistle-blowing may or may not be justi

Ethics and the Conduct of Business Eighth edition

Chapter 4

Whistle-Blowing

• Introduction: Whistle-Blowing

• 4.1: What Is Whistle-Blowing?

• 4.2: Justification of Whistle-Blowing

• 4.3: Right to Blow the Whistle

• 4.4: Developing a Policy

• Conclusion: Whistle-Blowing

Learning Objectives

• 4.1: Define the significance of whistle-blowing and the act itself according to seven criteria

• 4.2: Assess situations where whistle-blowing may or may not be justified, given the duties and obligations of all

parties and the potential consequences of the act

• 4.3: Describe the characteristics and importance of laws designed to protect whistle-blowers and key points in the debate over the moral justification of these laws

• 4.4: Identify the importance of developing an effective

whistle-blowing policy for an organization and the key

components of such a policy

Introduction: Whistle-Blowing

• Time magazine’s persons of the year

• Similarities and differences

• Points to consider

4.1: What Is Whistle-Blowing?

Objective: Define the significance of whistle-blowing and the act itself according to seven criteria

• What is whistle-blowing?

• Criteria for whistle-blowing

Table 4.1: What Constitutes

Whistle-Blowing?

Criteria Whistle-Blowing Not Whistle-Blowing

Who can blow the

What kind of information

importance Exposing matters of minor importance, such as incompetent management

inform individuals or groups outside the organization

Internal: An employee informs others within the organization by going outside normal channels of communication

An employee follows established procedures to report wrongdoing through normal channels of communication

What is the immediate

Was the person compelled

advancement

4.2: Justification of Whistle-Blowing (1 of 2)

Objective: Assess situations where whistle-blowing may or may not be justified, given the duties and obligations of all parties and the potential consequences of the act

• 4.2.1: Loyal Agent Argument

– Agent and principal

– Limits to agency duties

• 4.2.2: Meaning of Loyalty

– Pertinent questions

– Loyalty

4.2: Justification of Whistle-Blowing (2 of 2)

Objective: Assess situations where whistle-blowing may or may not be justified, given the duties and obligations of all parties and the potential consequences of the act

• 4.2.3: Conditions for Justification

– Analyzing the situation

– Taking action

– Role-based responsibilities

– Chances for success

4.3: Right to Blow the Whistle (1 of 2)

Objective: Describe the characteristics and importance of laws designed to protect whistle-blowers and key points in the debate over the moral justification of these laws

• 4.3.1: Existing Legal Protection

– Existing legal protection

– Other federal acts with anti-retaliatory provisions

– Sarbanes-Oxley Act

– False Claims Act

– The 2010 Wall Street Reform and Consumer

Protection Act

Table 4.2: Legal Protections for Whistle-Blowers

Federal Laws Provisions/Protections

The Sarbanes-Oxley Act of 2002 Prohibits retaliation against whistle-blowers who are

private sector employees, and entitles them to compensation for retaliation

Requires all companies to have confidential reporting procedures

The National Labor Relations Act of 1935 (NLRA) Prohibits retaliation against any employee who files a

charge with the National Labor Relations Board (NLRB) The False Claims Act Entitles whistle-blowers to file a qui tam action against a

company and receive 10–30% of the funds recovered in any suit, plus compensation for legal expenses

The 2010 Wall Street Reform and Consumer Protection

Act (Dodd-Frank Bill) Strengthens protections in other laws and enforces new provisions for financial markets

Entitles whistle-blowers to monetary awards for violations

of security laws and rules enforced by the new Consumer Financial Protection Bureau

Creates a special SEC whistle-blower office State laws Most protect only state employees

Most specify whistle-blowing procedures and

4.3: Right to Blow the Whistle (2 of 2)

Objective: Describe the characteristics and importance of laws designed to protect whistle-blowers and key points in the debate over the moral justification of these laws

• 4.3.2: Arguments against Protection

– Encroach on the rights of employer

– Reinstatement

• 4.3.3: Arguments for Protection

– Contribution to the society

– Freedom of speech

4.4: Developing a Policy

Objective: Identify the importance of developing an effective whistle-blowing policy for an organization and the key components of such a policy

• 4.4.1: Benefits and Dangers

– Benefits and dangers

• 4.4.2: Components of a Policy

– Clearly defined procedure for reporting

– Well-trained personnel to receive and investigate

reports

– Commitment to take appropriate action

Conclusion: Whistle-Blowing

• Whistle-blowing is ethical

• Under certain carefully specified conditions

• When revealed in a justified manner