Would it work for your company? Whisper it, but is it time all UK companies offered financial rewards to whistle-blowers?
Which side of the debate are you on? Should we get paid for blowing the whistle?
The SEC paid out $37 million to whistle-blowers in 2015 and has $400 million in its Investor Protection Fund to finance future awards.
Since the whistle-blower program was set up in 2011, it's paid out $111 million. It's certainly been a game-changer by providing a financial incentive for insiders to blow the whistle on corporate malpractice.
Let's take a moment to weigh this up and examine the pros and cons...
The pros of whistle-blowing
- In critical industries (such as health, nuclear, etc), where the consequences of non-compliance are greatest - it's surely a no-brainer
- Would it speed up reporting and uncover wrongdoing more quickly?
- Longer term, with nowhere to hide, would a new era of greater accountability ensue?
The cons of whistle-blowing
- Would there be a spike in false reports?
- Would employees see it as a win/win - a nice little earner plus a chance to get back at their boss or colleague?
- Longer term, would it lead to dramatic changes in working relationships or loss of trust?
By offering to financial rewards to whistle-blowers, aren't we asking people to do the right thing but for the wrong reasons?
While in the short-term it may well nudge insiders to disclose malpractice, it may not fundamentally alter behaviour. Surely what we want is for people to speak out and act with integrity, with everyone's best interests at heart - not just their own.