Whistleblowing Incentives

Date25 January 2020
Published date25 January 2020
Subject MatterAccounting & Finance,Financial risk/company failure,Financial crime
AuthorFabian Maximilian Teichmann,Marie-Christin Falker
Whistleblowing Incentives
Fabian Maximilian Teichmann
Teichmann International AG, St. Gallen, Switzerland, and
Marie-Christin Falker
Teichmann International (Schweiz) AG, St. Gallen, Switzerland
Purpose The purpose of the paper is to illustratehow companies may benef‌it from whistleblowing and
how whistleblowingmay be incentivized to more effectivelycombat corruption.
Design/methodology/approach No clear hypothesis could be formulated based on the literature
review. Therefore, an explorative approach was selected for the purpose of this study. Ten selected
complianceexperts were interviewed, and the resultswere subjected to summarizing content analysis.
Findings It was found that corruption, particularly bribery, continues to be prevalent in many
corporations and that current anti-bribery incentives are rather ineff‌icient. It was also found that
whistleblowingincentives have thus far not been investigated in suff‌icient depth in the literature,despite the
fact that theycan be immensely useful in combating corruption.
Research limitations/implications Interviews with differentexperts, at different times, or selecting
expertsfrom different locations could have led to divergingresults.
Practical implications Incentive systems, particularly whistleblowing incentives,can be designed to
prevent corruptionin multinational corporations.
Originality/value This study explores a new f‌ield and develops innovative theory to gain a deeper
understandingof whistleblowing.
Keywords Whistleblowing, Corruption, Incentives, Compliance, Bribery
Paper type Research paper
The elimination of corruption and internal problem behavior is of tremendous importance
for multinational corporations because the neglect of legal compliance requirements may
have severe negative consequences. In most jurisdictions, corporations are legally obligated
to follow anti-corruption protocols. If they fail to do so, prosecution maypotentially lead to
f‌ines and prison sentences. Nonetheless, corruption continues to represent a grave
international issue in many corporations. It can be assumed that the number of unreported
or undetected cases is quite high,as the parties involved who prof‌it fromcorruption usually
have no desire to reveal its presence. Most frequently, the parties who prof‌it from non-
compliant behavior, however, work in lower levels of corporate hierarchies, whereas the
management bears the greatest risk associated with noncompliance. In sales, in particular,
the wages of many employees are variable and dependent on their sales f‌igures.
Furthermore, bonuses are frequently used as an incentivetool to increase the performances
of these employees. When employees are incentivized to increase their sales numbers, there
is a possibility that they may resort to legally noncompliant means to reach their targets.
However, it is necessary to inhibit corruption to prevent the establishment of a criminal
company culture. Furthermore, penological and supervisory risks must be minimized so
that the long-term survival of the enterprisemay be ensured. In case of a prosecution, board
members will be confrontedwith enormous personal risks.
Journalof Financial Crime
Vol.28 No. 2, 2021
pp. 394-405
© Emerald Publishing Limited
DOI 10.1108/JFC-10-2019-0132
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