Whistleblowing: head to head

Simon Webley, research director at the Institute of Business Ethics, and Linda Farrell, partner at international law firm Bristows, share their views…

A survey of the UK’s top 250 public companies has found that only four in 10 train their managers to handle whistleblowers, while less than a quarter train staff on how to use the procedure. Should firms be legally obliged to have a whistleblowing policy in place?

Simon Webley

While it’s good practice to have a means for staff to raise issues, it would be counterproductive to make this compulsory. Despite this, it is in a firm’s best interests to make sure staff feel free to raise issues that concern them. The best term for this is a ‘speak up’ policy, as the term ‘whistleblower’ has negative connotations and usually refers to staff or ex-staff who speak to the media about something of which they disapprove.

Linda Farrell

Making whistleblowing policies mandatory is not, of itself, necessarily effective, and what is more relevant is the culture of an organisation. Foisting further mandatory compliance obligations on smaller organisations will involve considerable management time and cost, while introducing a policy may actually encourage spurious and vexatious allegations.

Would a legally binding whistleblowing policy give employees some much-needed belief in the procedure?

Simon Webley

It would be yet another regulation with doubtful benefits. A disgruntled employee has grievance procedures to follow and most employers take these seriously. If an employee feels they are not being heard, that is a sign of poor management. The person will either leave or ‘make a noise’ and that will be the fault of the firm, which will then have to bear the consequences of its neglect in this area.

Linda Farrell

For a policy to be truly effective, a cultural shift towards openness and accountability in the workplace is required. The formal adoption of a policy can only provide so much comfort. If an employee still harbours suspicions that making a disclosure will expose them to risk of discrimination and/or dismissal, then they may still be unwilling to take that risk. The existence of an advertised whistleblowing policy, combined with visible training for employees and managers, are two things that help to instil some confidence that the policy is in place for a reason other than just compliance purposes.

Would a clear, concise whistleblowing law also make it easier for employers to know where they stand and act accordingly?

Simon Webley

The Public Interest Disclosure Act 1998 (PIDA) gives some protection to a whistleblower who, having exhausted the internal procedures, decides to go public. This law makes it clear where employers stand.

Linda Farrell

Employers should welcome the flexibility inherent in the existing whistleblowing regime. They will be aware that they run the risk of whistleblowers being able to disclose concerns legitimately outside the company if their internal procedures are not adequate, but have been allowed to allocate that risk as they see fit: either using the available guidance to frame a robust whistleblowing policy or else deciding not to expend their resources in this manner.

Do independent hotlines help to encourage whistle-blowing, or are they little more than a form of damage limitation?

Simon Webley

Hotlines, either advice or helplines, are widely used in larger companies. They are used to ‘blow the whistle’ and have proved useful in stopping an illegal or unethical practice. Their aim is to enable staff, contractors etc to have a means to highlight a concern confidentially without fear of retaliation.

Linda Farrell

There is bound to be an element of damage limitation in any measures put in place to address the disclosure of possible malpractice, but the creation of hotlines does not appear to involve any greater element of self-interest than any other procedure. The whole purpose of the whistleblowing regime is to protect employees from reprisals, and genuinely independent and confidential helplines, manned by trained staff, would seem to tie in with that objective. Such hotlines protect both employees and their employers.

Is whistleblowing good or bad for business?

Simon Webley

An open culture in any organisation is good for business. If someone feels they have to ‘blow the whistle’ outside the organisation, the management is failing to manage properly. Providing the means for staff to raise issues without fear is good for business.

Linda Farrell

Whistleblowing can be very helpful to an organisation as early internal disclosure of concerns can keep reports of malpractice out of the media, thereby protecting the business’s reputation and maintaining the confidence of investors. It also enables senior management to react to a problem before it spirals out of control, allowing them to reduce the chance of a legal claim being brought against the company. The impact of the whistleblowing regime on the culture of an organisation can also be significant helping to foster better internal communication and recognising the accountability of management as well as the responsibility of employees.

Treatment of whistleblowers

  • The issue of corporate whistleblowing has long been contentious, yet a recent survey by Ernst & Young found that 86% of employees would feel comfortable blowing the whistle at work if they suspected fraud or other wrongdoing. Meanwhile, however, another survey funded by the British Academy found that only four in 10 FTSE 250 companies provide any training for managers on how to handle whistleblowers, and less than one-quarter offer training for potential users of the procedure.
  • The UK has developed a strong anonymous reporting culture on the back of laws such as the Public Interest Disclosure Act 1998 (PIDA), which prevents employers sacking whistleblowers who act in good faith. And almost half of FTSE top 250 firms have a ‘hotline’ dedicated to the reporting of company concerns, with 31% providing the service internally.


If you require employers to have a policy, you inevitably have to tell them what must be in it. That stops them thinking about the issue. The best way of embedding a whistleblowing culture is simply to get organisations to communicate it to their staff. More instructions telling organisations and staff what they have to do simply for fear of being sued will not embed a whistleblowing culture. Plus, the new Ernst & Young survey shows UK employees are already twice as likely to blow the whistle as their EU counterparts. So it would seem that UK employees already have confidence in the procedures. But at the same time, external hotlines can be problematic as they tend to emphasise anonymity, undermine any buy-in from management, and confuse whistleblowing concerns with grievances and bullying.

Guy Dehn
Public Concern at Work

It’s already a matter of good practice to have a whistleblowing policy. However, that doesn’t mean that managers will be trained in applying the policy, nor that employees will be made familiar with it. While legislation requiring all employers to have such a policy may help to change this, it is more important to educate employers on the benefits of having a policy, and how it can protect them as well as the employee who is ‘blowing the whistle’. Yet the fundamental principle is that a whistleblowing policy will only ever be effective if those implementing it are fully committed to the objectives behind it. A well-managed whistleblowing policy also demonstrates that a company promotes business ethics and it should act as a system of self-regulation. This can be extremely beneficial if there are detrimental practices going on within a company, of which it may not be aware, which it could rectify if they are brought to its attention by employees making disclosures.

Joanne Martin
The Hardman Partnership

Legislative change always risks introducing unintended consequences and unwarranted administrative burdens. The Public Interest Disclosure Act 1998 is already a concise and helpful law protecting the rights of whistleblowers under employment law. While not including any mandatory requirement for employers to have whistleblowing policies, it does provide them with a clear incentive to do so, since whistleblowers who do not have a means of raising their concerns internally cannot be prevented from raising them externally. Listed companies already have effective guidance, under paragraph C3.4 of the Combined Code for Corporate Governance, on the desirability of having a whistleblowing system in place. If this is considered sufficient for listed companies, it is difficult to see how further legislative solutions will be justified for unlisted companies.

Anne Davis
Ethics manager
Institute of Chartered Accountants in England & Wales

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