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2020 | OriginalPaper | Buchkapitel

2. The Ethics of Corporate Whistleblowing Rewards

verfasst von : Vivienne Brand

Erschienen in: Corporate Whistleblowing Regulation

Verlag: Springer Singapore

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Abstract

Corporate whistleblowing regulation has experienced rapid evolution in a number of significant jurisdictions in recent years, most notably in the United States. One of the most controversial aspects of contemporary reform in corporate whistleblowing regimes is the debate over whether or not to introduce whistleblowing rewards or ‘bounties’. This chapter considers the ethical analysis that can be brought to bear in relation to the offering of corporate whistleblowing rewards, and how that might assist in ensuring that rewards have a place in an effective corporate whistleblowing regulatory environment.

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Vorheriges Kapitel Regulatory Policies and Practices to Optimize Corporate Whistleblowing: A Comparative Analysis

Nächstes Kapitel To Reward or Not to Reward: A Cross-Jurisdictional Comparison of the Reasons Why Securities Regulators Have Adopted or Rejected Policies to Pay Whistleblowers

See for instance De George (2010, p. 303), Rapp (2007, pp. 95–6, 118) and Gobert and Punch (2000, pp. 34–6).

See for instance recent empirical work on the direct relationship between whistleblowers and increased speed and efficacy of enforcement: Call et al. (2018).

Dodd-Frank Act § 922(a); FCPA § 78dd-1.

The highest reward paid by the SEC to a whistleblower as of 2018 stood at almost $US50M: US Securities and Exchange Commission (2018, p. 9).

Ontario Securities Commission, OSC Policy 15-601, Whistleblower Program, July 2016.

Callahan and Dworkin (1992, p. 279), and the legislation cited there.

Blount and Markel (2012, p. 1028) and the sources cited there (footnotes omitted from quotation).

Bank of England Prudential Regulation Authority and Financial Conduct Authority (2014, p. 3).

Parliamentary Joint Committee on Corporations and Financial Services, Parliament of Australia, Whistleblower Protections (September 2017); Treasury Laws Amendment (Enhancing Whistleblower Protections) Act, 2018 (Cth).

Parliamentary Joint Committee on Corporations and Financial Services, Parliament of Australia, Whistleblower Protections (September 2017), 130.

Hoffman and Schwartz (2015, p. 771).

De George (2015, p. 801).

Ibid.

See generally, De George (2010, Chap. 14).

De George (2010, p. 311).

De George (2010, p. 304).

Hoffman and Schwartz (2015, p. 774).

Velasquez (2018, p. 362).

Hoffman and Schwartz (2015, p. 774).

Ibid., p. 777.

Treasury Laws Amendment (Enhancing Whistleblower Protections) Act, 2018 (Cth), inserting s 1317AAD: ‘Public interest disclosure and emergency disclosure’ into the Corporations Act, 2001 (Cth).

Andrade (2015).

Ibid., p. 334.

Ibid., p. 332.

Hoffman and Schwartz (2015, p. 777).

Ibid.

Ibid., p. 774.

Ibid., p. 775.

A requirement of this kind does not, for instance, form part of the existing whistleblowing systems created by the Corporations Act, 2001 (Cth), the Ontario Securities Commission, OSC Policy 15-601, Whistleblower Program, or the United States Securities Exchange Commission, Office of the Whistleblower, Final Rules, § 240.21F-6 Criteria for determining amount of award.

De George (2010, Chap. 14), Hoffman and Schwartz (2015, p. 775), and the commentators discussed there.

See Hoffman and Schwartz (2015, p. 775), and the commentators discussed there.

For whistleblowing to be morally required, De George argues the whistleblower must (amongst other things) be able to produce ‘documented evidence that would convince a reasonable, impartial observer that one’s view of the situation is correct’: De George (2010, pp. 310–311).

De George (2010, p. 310).

Hoffman and Schwartz (2015, p. 776).

Callahan and Dworkin (1992, p. 319).

Many of these issues were discussed by a 2017 Australian Parliamentary Joint Inquiry on Whistleblower Protections, in which the introduction of rewards was considered, offering a rare opportunity for the ethical considerations associated with whistleblower rewards to be interrogated in a public forum: Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017.

Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, at [11.34], Dr Simon Longstaff, the Ethics Centre.

Ebersole (2011, p. 139).

Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, at [11.56].

Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, at [11.32], the Institute of Internal Auditors.

Bank of England Prudential Regulation Authority and Financial Conduct Authority (2014, p. 3).

On the potential for financial incentives to increase the risk of external whistleblowing without earlier internal disclosure see Hoffman and Schwartz (2015, p. 773).

Bank of England Prudential Regulation Authority and Financial Conduct Authority (2014, p. 2).

Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, at [11.14].

Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections (2017) [11.35], Mr. Matthew Chesher.

Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections (2017) [11.30], [11.31].

Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, at [11.39], Vivienne Brand and Sulette Lombard, Flinders University; and at [11.40], Lucas Ryan. Senior Policy Advisor, Australian Institute of Company Directors.

Bank of England Prudential Regulation Authority and Financial Conduct Authority (2014, p. 3); noted by the Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, at [11.14].

Ebersole (2011, pp. 146–7).

See, for instance, the evidence of the Institute of Internal Auditors to the 2017 Australian Federal Inquiry: Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, at [11.45].

The US SEC notes in its 2018 Annual Report that it received over 5200 whistleblower tips in the 2018 financial year, representing a nearly 75% increase on the same period 6 years earlier: US Securities and Exchange Commission (2018, p. 2).

Call et al. (2018).

Schwartz (2016, p. 755).

Callahan and Dworkin (1992, p. 283).

Ibid., p. 301.

Ibid., p. 302.

Feldman and Lobel (2010).

Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, at [11.34], Dr. Simon Longstaff, the Ethics Centre.

Feldman and Lobel (2010, p. 1179).

Ibid.

Ibid., p. 1202.

Ibid., p. 1205.

Ibid., p. 1189.

Ibid., pp. 1183–4; Sunstein (1996).

Sunstein (1996, p. 2026).

Ibid., p. 2031.

McGinn (2015, p. 1).

Feldman and Lobel (2010, p. 1184).

McGinn (2015, p. 1).

Sunstein (1996, p. 2053).

Ibid., p. 2051. For a comparison between different design elements in whistleblowing bounty systems and their capacity to influence behavior, see Blount and Markel (2012, pp. 1029–36).

De George (2015, p. 801).

Pittroff (2016, p. 715).

Kohlberg (1981, 1984).

Kohlberg (1973, p. 631).

Kohlberg (1981, 1984).

Gilligan (1982).

Chang-Ho (1997) and Ma and Cheung (1996).

Trevino (1992, p. 445).

Gibbs (2015).

Empirical evidence suggests that the higher moral reasoning levels 5 and 6 occur with low frequency, although Kohlberg argued this did not mean the stages do not exist: Kohlberg (1984, p. 328).

Feldman and Lobel (2010, pp. 1183–4), see also Sunstein (1996) and Anderson and Pildes (2000).

Sunstein (1996, p. 2043).

De George (2010, p. 304).

As occurs under the Australian whistleblowing reforms of 2019: Treasury Laws Amendment (Enhancing Whistleblower Protections) Act, 2018 (Cth), inserting s1317AI into the Corporations Act, 2001 (Cth).

Varelius (2009, p. 272).

United States Securities Exchange Commission, Office of the Whistleblower, Final Rules, § 240.21F-6 Criteria for Determining Amount of Award. See also the United States Securities and Exchange Commission (2017, p. 14).

Andrade (2015, p. 334).

In terms of, for example, s 172 of the Companies Act, 2006 UK.

Securities Exchange Act 1934 (US) s 21F(b)(1).

Securities Exchange Commission, Final Rules Implementing the Whistleblowing Program, § 240.21F-4 Other definitions.

See, for instance, the comments of the Queensland Ombudsman cited in the Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, [11.37].

Hoffman and Schwartz (2015, p. 776).

Ibid.

Sunstein (1996, p. 2026).

United States Securities Exchange Commission, Office of the Whistleblower, Final Rules, § 240.21F-6 Criteria for Determining Amount of Award. Similarly, the Australian 2017 PJC Report recommended that the timeliness with which a disclosure is made ought to influence the level of reward paid: Parliamentary Joint Committee on Corporations and Financial Services, Whistleblower Protections, September 2017, Recommendation 11.2, [11.59].

Ontario Securities Commission, OSC Policy 15-601, Whistleblower Program, July 2016: Part 5: 18. Amount of Whistleblower Award.

Ontario Securities Commission, OSC Policy 15-601, Whistleblower Program, July 2016, 11.

100

Ontario Securities Commission, OSC Policy 15-601, Whistleblower Program, 3, 9.

101

Feldman and Lobel (2010, pp. 1155, 1202).

102

See the discussion in Brand (2018, p. 418).

103

Securities Exchange Act 1934 (US) section 21F; Ontario Securities Commission, OSC Policy 15-601, Whistleblower Program, July 2016, 11.

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Titel: The Ethics of Corporate Whistleblowing Rewards
verfasst von: Vivienne Brand
Verlag: Springer Singapore
Buch: Corporate Whistleblowing Regulation
Print ISBN: 978-981-15-0258-3

Electronic ISBN: 978-981-15-0259-0

Copyright-Jahr: 2020
DOI: https://doi.org/10.1007/978-981-15-0259-0_2

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