Whistleblowers — A Legitimate Role in Corporate Life?

Date01 April 1996
DOIhttps://doi.org/10.1108/eb025774
Published date01 April 1996
Pages179-182
AuthorGary Bastin,Peter Townsend
Subject MatterAccounting & finance
Journal of Financial Crime Vol. 4 No. 2 Whistleblowing
WHISTLEBLOWING
Whistleblowers A Legitimate Role in Corporate
Life?
Gary Bastin and Peter Townsend
The repercussions for the exposed whistleblowing
employee are not always as drastic as those for
Stanley Adams1 or Karen Silkwood.2 Adams, an ex-
senior executive at Hoffman-La Roche in Switzer-
land who, in 1973, reported his employer to the
European Commissioner for Competition over the
involvement of the company in anti-competitive
practices, suffered a series of dreadful consequen-
ces,3
including imprisonment as a punishment for
the crime of 'economic espionage', contrary to the
Swiss Penal Code. More recently, a police inves-
tigation has begun into the death, in July 1991, of
Paul Scully, an ex-copper broker at the American
company DLT, who had attempted to blow the
whistle on suspicious trading in the copper mar-
kets.4
More commonly, those who decide to take on
the role of informer by drawing attention to some
form of malpractice at their place of employment,
do so at the risk of paying a price in terms of job
security and continued employment prospects. In
1995,
for instance, a life assurance manager who
reported a breach, by his firm, of LAUTRO regu-
lations, was subjected to 'months of hell' by his
supervisor and told, on the termination of his
employment, that he would never work in the
industry again.5 A number of recent controversial
cases,
involving organisations such as Barings and
Barlow-Clowes, have demonstrated the almost
infinite range of turbulent situations that corpora-
tions may find themselves in and have highlighted
the dilemma faced by highly principled (or, per-
haps,
disaffected) employees, who cannot resist the
call to communicate their misgivings about ques-
tionable aspects of corporate life and yet feel dis-
qualified from expressing opinions internally.6 It is
little wonder that corporate staff occasionally feel
the need to 'blow the whistle', particularly in the
light of the very limited involvement of employees
in the decision-making process in most corpora-
tions and the lack of a satisfactory legal framework
to encourage such participation.7
Some employers have addressed this problem in
a positive and mature fashion by, for instance, pro-
viding accessible and confidential channels of com-
munication for use by staff who wish to raise
genuine concerns.8 All too often, however, the
response to the potential danger represented by a
disgruntled employee who might decide to speak
out, is to resort to some form of contractual fetter
on the freedom of speech. Gagging clauses have,
regrettably, become an all too familiar feature of
corporate life, binding employees to promises of
silence with respect to particular or, sometimes,
very general matters about the employing organisa-
tion. A recent phenomenon has been the almost
routine use of such clauses as part of legal settle-
ments between employers and former employees,
where the recipient of a 'compensation package' is
Page 179

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT