Ethics and the conduct of business 8th by john boatright and smith 2017 chapter 4

Ethics and the Conduct of Business Eighth edition Chapter Whistle-Blowing Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Modules • Introduction: Whistle-Blowing • 4.1: What Is Whistle-Blowing? • 4.2: Justification of Whistle-Blowing • 4.3: Right to Blow the Whistle • 4.4: Developing a Policy • Conclusion: Whistle-Blowing Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Learning Objectives • • • • 4.1: Define the significance of whistle-blowing and the act itself according to seven criteria 4.2: Assess situations where whistle-blowing may or may not be justified, given the duties and obligations of all parties and the potential consequences of the act 4.3: Describe the characteristics and importance of laws designed to protect whistle-blowers and key points in the debate over the moral justification of these laws 4.4: Identify the importance of developing an effective whistle-blowing policy for an organization and the key components of such a policy Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Introduction: Whistle-Blowing • Time magazine’s persons of the year • Similarities and differences • Points to consider Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 4.1: What Is Whistle-Blowing? Objective: Define the significance of whistle-blowing and the act itself according to seven criteria • What is whistle-blowing? • Criteria for whistle-blowing Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Table 4.1: What Constitutes WhistleBlowing? Criteria Whistle-Blowing Not Whistle-Blowing Who can blow the whistle? An individual inside an organization exposes wrongdoing to the outside world A witness to a crime or a reporter What kind of information is involved? Nonpublic information that reveals new facts Facts that are already known to the public What is it reserved for? Calling attention to matters of substantial importance Exposing matters of minor importance, such as incompetent management Who is informed and how? External: An employee “goes public” to inform individuals or groups outside the organization Internal: An employee informs others within the organization by going outside normal channels of communication An employee follows established procedures to report wrongdoing through normal channels of communication What is the immediate goal? To correct a wrong by bringing about a desired change To pass on information about wrongdoing to a supervisor, director, or a third party Was the person compelled to act? The release of information is voluntary The testimony is legally compelled (by a court of law) What is the motive? To stage a moral protest To seek revenge or personal advancement Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 4.2: Justification of Whistle-Blowing (1 of 2) Objective: Assess situations where whistle-blowing may or may not be justified, given the duties and obligations of all parties and the potential consequences of the act • 4.2.1: Loyal Agent Argument – Agent and principal – Limits to agency duties • 4.2.2: Meaning of Loyalty – Pertinent questions – Loyalty Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 4.2: Justification of Whistle-Blowing (2 of 2) Objective: Assess situations where whistle-blowing may or may not be justified, given the duties and obligations of all parties and the potential consequences of the act • 4.2.3: Conditions for Justification – – – – Analyzing the situation Taking action Role-based responsibilities Chances for success Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 4.3: Right to Blow the Whistle (1 of 2) Objective: Describe the characteristics and importance of laws designed to protect whistle-blowers and key points in the debate over the moral justification of these laws • 4.3.1: Existing Legal Protection – – – – – Existing legal protection Other federal acts with anti-retaliatory provisions Sarbanes-Oxley Act False Claims Act The 2010 Wall Street Reform and Consumer Protection Act Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Table 4.2: Legal Protections for WhistleBlowers Federal Laws Provisions/Protections The Sarbanes-Oxley Act of 2002 Prohibits retaliation against whistle-blowers who are private sector employees, and entitles them to compensation for retaliation Requires all companies to have confidential reporting procedures The National Labor Relations Act of 1935 (NLRA) Prohibits retaliation against any employee who files a charge with the National Labor Relations Board (NLRB) The False Claims Act Entitles whistle-blowers to file a qui tam action against a company and receive 10–30% of the funds recovered in any suit, plus compensation for legal expenses The 2010 Wall Street Reform and Consumer Protection Act (Dodd-Frank Bill) Strengthens protections in other laws and enforces new provisions for financial markets Entitles whistle-blowers to monetary awards for violations of security laws and rules enforced by the new Consumer Financial Protection Bureau Creates a special SEC whistle-blower office State laws Most protect only state employees Most specify whistle-blowing procedures and requirements for protection Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 4.3: Right to Blow the Whistle (2 of 2) Objective: Describe the characteristics and importance of laws designed to protect whistle-blowers and key points in the debate over the moral justification of these laws • 4.3.2: Arguments against Protection – Encroach on the rights of employer – Reinstatement • 4.3.3: Arguments for Protection – Contribution to the society – Freedom of speech Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved 4.4: Developing a Policy Objective: Identify the importance of developing an effective whistle-blowing policy for an organization and the key components of such a policy • 4.4.1: Benefits and Dangers – Benefits and dangers • 4.4.2: Components of a Policy – Clearly defined procedure for reporting – Well-trained personnel to receive and investigate reports – Commitment to take appropriate action Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved Conclusion: Whistle-Blowing • Whistle-blowing is ethical • Under certain carefully specified conditions • When revealed in a justified manner Copyright © 2017, 2012, 2009 Pearson Education, Inc All Rights Reserved ... obligations of all parties and the potential consequences of the act 4. 3: Describe the characteristics and importance of laws designed to protect whistle-blowers and key points in the debate over the. .. given the duties and obligations of all parties and the potential consequences of the act • 4. 2.1: Loyal Agent Argument – Agent and principal – Limits to agency duties • 4. 2.2: Meaning of Loyalty... justification of these laws 4. 4: Identify the importance of developing an effective whistle-blowing policy for an organization and the key components of such a policy Copyright © 2017, 2012, 2009