Corporate whistleblowing: Balancing moral courage with moral responsibility
Opinion + AnalysisBusiness + LeadershipRelationships
BY Kristina Novakovic 23 MAY 2023
Calling out corporate wrongdoing requires the moral courage to stand up for what you believe in, but also involves recognising the moral agency of others.
The story of Jeff Morris is both inspiring and daunting; inspiring because he decided to take on one of the largest banks in Australia alone by exposing corrupt practices that placed customers in financial danger, and daunting because of the fate that he suffered as a result.
Commonwealth Bank Australia’s (CBA) financial planners knowingly gave harmful financial advice to elderly and vulnerable customers that led them to severe financial losses and emotional distress. Morris spent five years trying to get the CBA and ASIC to confront the wrongdoing and set it right, attempting to force a Parliamentary Inquiry before he finally decided that the only way to protect customers from these practices was to go to the media with his story in 2013. This led to the firing of rogue CBA financial planners involved in these practices and triggered the landmark financial services royal commission.
Today, Jeff Morris stands as an admirable figure, having been awarded the Order of Australia for blowing the whistle on his employer. However, in the immediate aftermath of blowing the whistle on CBA, Morris was fired from the bank, his family left him due to the financial stress his actions put them under, he was diagnosed with PTSD and suffered constant surveillance and harassment.
The whistleblower’s moral dilemma
Corporate whistleblowers, like Morris, face a moral dilemma of balancing competing responsibilities to the organisation they work for and the responsibility they have to the consumer.
As an employee of the CBA, Morris was presumably hired with the condition that he must keep confidential information about the bank’s internal practices. This is often non-controversial. Corporations have valid reasons for not wanting their internal practices revealed, like wanting to protect their unique products and services from competitor corporations. When signing an employment contract, we often find that we’re being asked to sign a confidentiality agreement. We’re essentially promising to keep the organisation’s secrets secret.
By blowing the whistle on corporate wrongdoing, we are breaking this very promise. While promise-breaking itself is not necessarily morally wrong, often there is “moral residue” left over. What this means is, we might be justified in breaking a promise, but it might incur an obligation to remedy, say in apologising for breaking the promise, or making up for the broken promise in some compensatory way. This indicates that the breach of contract, in such a sense, does not necessarily leave us “morally clean”.
This is the first moral transgression: the breach of promissory obligation.
When we work for an organisation or corporation, we may find that there is an internal culture of loyalty or expected loyalty to both the organisation itself and to our fellow employees. By blowing the whistle on corporate wrongdoing, we could potentially be harming our fellow colleagues who may be out of work as a result of the disclosures. The organisational culture might be harmed in that we have introduced dissent into a culture that benefits from employee solidarity; the result, a sense of broader distrust.
This is the second moral transgression: a breach of loyalty.
However, as a member of an organisation or corporation that delivers products and services to the public, we also have an obligation toward the public consumer. If, like in Morris’ case, the corporation is delivering a service that is harming the consumer, we might feel an obligation to protect the broader public from these harmful practices.
To not publicly disclose the wrongdoing, we might be committing a third transgression: a breach of a natural duty to not cause harm to others.
A corporate whistleblower’s framework for harm minimisation
If there is sufficient wrongdoing that needs to be called out, it’s important to take appropriate steps to produce the best outcome. The best outcome, in these circumstances, would be one in which harm is minimised to all relevant stakeholders. Business ethicist, Richard T. De George developed, what the field of business ethics today considers the standard ethics framework for responsibly blowing the whistle on corporate wrongdoing.
He sets out the following conditions that suggest when we are morally permitted to blow the whistle and what moral consideration we ought to keep in mind before we do so:
- The firm, through its product or policy, will do serious or considerable harm, to employees or to the public, whether in the person of the user of its product, an innocent bystander or the general public.
- Once the employees identify a serious threat to the user of its product or to the general public, they should report it to their immediate supervisor and make their moral concern known. Unless they do so, their act of whistleblowing is not clearly justifiable.
- If one’s immediate supervisor does nothing effective about the concern or complaint, the employee should exhaust the internal procedures and possibilities within the firm. This usually will involve taking the matter up the managerial ladder, and if necessary – and possible – to the board of directors.
- The whistleblower must have, or have accessible, documented evidence that would convince a reasonable, impartial observer that one’s view of the situation is correct, and that the company’s product or practice poses a serious and likely danger to the public or to the user of the product.
Before we take action, we need moral courage
What De George does not account for, however, is that to follow his guidelines, we must have the moral courage to take action in the first place.
Associate Professor of Philosophy at Eastern Kentucky University, Matthew Pianalto writes that moral courage involves “facing other persons while upholding some morally motivated cause and enduring resistance or retaliation that may occur in response to one’s actions”.
We often think of courage as involving being brave when taking an action that presents a danger to ourselves. It takes courage to jump into dangerous surf to save someone from drowning. In this sense, courage is an enabling device.
Morris demonstrated this aspect of courage: he was aware of the retaliation that he would experience as a result of blowing the whistle yet did so anyway.
However, moral courage involves something else: a requirement to face others. This requirement, Pianalto writes, involves resisting “the objectification of others, even those [we] oppose in value and action”. Corporate whistleblowers are exercising moral agency by taking actions that uphold or preserve what we think is morally right and just. However, moral courage also involves recognising the moral agency of others. It is easy to other-ise those we consider our moral adversaries. We can justify taking action against them easier if we denounce them as being morally depraved.
By not considering the corporation as being made up of other humans, i.e., other moral agents just like ourselves, we may become more inclined to ignore the conditions of harm minimisation set out above. We might be prioritising the moral values we are trying to uphold at the expense of the moral responsibility we have to those that might be adversely affected by our actions. As Pianalto writes, by offering justifications for our actions, we are “[acknowledging] the capacity of others to give and receive reasons, to modify their views, revise their intentions and to change their minds…”.
Morris seems to have exhibited moral courage. He took every precaution necessary, heeding (whether he was aware of it or not) the guidelines set by ethicists like De George to protect not only his family (who raised concerns about how they might be affected by his actions), but also those other moral agents working for ASIC and the CBA that may not have been involved in the wrongdoing.
Whistleblowing on corporate wrongdoing is a serious act, one that requires us to take mindful steps. If these steps are taken, they can reduce the moral courage required of us to act.
If you’re struggling with navigating a difficult decision in your professional or personal life, our free independent helpline, Ethi-call can provide expert and impartial guidance to examine all aspects of the situation and help you find a path forward. Book a call now.
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