Include me out: whistleblowing and a “larger loyalty”

Loyalty plays a profound role in many aspects of modern civilization, including in the business world. Samuel Goldwyn – the font of much memorably expressed folk wisdom – was doubtless speaking for many business leaders in saying, “I’ll take fifty percent efficiency to get one hundred percent loyalty.” But when it comes to C&E, pure loyalty can be a mixed blessing.

In their soon-to-be-published paper “The Whistleblower’s Dilemma and the Fairness-Loyalty Tradeoff,”  Adam Waytz, of Northwestern University,  and James Dungan  and Liane Young,  both of Boston College, examine the powerful psychological conflict facing many potential whistleblowers: “Whistleblowing promotes justice and fairness but can also appear disloyal.” They note that prior “studies have shown that fairness norms typically dominate behavior but may be overwritten in contexts that pit fairness against loyalty,” and  show through five studies they conducted that “differences in valuing fairness over loyalty predict willingness to report unethical behavior.”  Their “findings offer recommendations for how to promote fairness and to encourage whistleblowing,” including reframing whistleblowing to be seen as reflecting a “’larger loyalty’… toward a more universal social circle…”

Of course, none of this will be a great revelation to C&E professionals. But, as with other studies that this blog has covered from the realm of behavioral ethics  or moral intuitionism,  having the data to back up what is anecdotally known from “field work”  can be helpful in focusing management and boards on key C&E program needs –  in this case the need to reframe  whistleblowing as reflecting a “larger loyalty.” 

C&E practitioners have long looked for ways to do just that.  For instance, years ago I helped to develop a short C&E training video that sought to evoke feelings of a larger loyalty by showing the faces of colleagues laid off in the wake of an accounting scandal that could have been, but wasn’t, stopped in the early stages by a potential whistleblower, and I imagine that other training programs have taken a similar approach.  In a somewhat like vein, Scott Killingsworth has recently published a very fine paper in The Georgetown Journal of Legal Ethics – discussed and linked to here – on compliance communications strategies that can help companies transcend the “us-versus-them” mindset which is harmful from a compliance perspective.

A related facet of promoting a larger loyalty is by striving – through various measures – to maintain “organizational justice” at a company. As described in this earlier post,   “According to research conducted by the Corporate Executive Board (the “CEB”) of about 600,000 employees of more than 140 companies, one of the most important steps to promoting compliance is maintaining ‘organizational justice.’  The CEB notes: ‘A firm’s culture has organizational justice when employees agree that 1) their firm responds quickly and consistently to proven unethical behavior and 2) that unethical behavior is not tolerated in their department.’” The significance of this research is that it suggests that individuals are more likely to embrace their company’s shareholders and fellow employees (rather than just a small circle of co-workers) within a larger loyalty if the loyalty is seen as mutual.

One of Goldwyn’s other celebrated sayings was “Include me out,” but – although the context for the remark is unknown to me –  I doubt this concerned whistleblowing.  (Okay – I basically quoted it just for fun.)  However, clearly programs need to find ways to make potential whistleblowers want to be included “in,” so that they share key information about wrongdoing with companies rather than letting the problems fester and grow. And the Waytz-Dungan-Young paper should help C&E officers make the case to leaders in their respective companies for finding effective ways to do that.

A final point: because this post is more about means than ends, I have deliberately taken a relatively narrow view of what a “larger loyalty” might mean, i.e., essentially one that is dictated solely by fiduciary duties.  However, my own view is that – as an ethical, if not legal, matter – we need to create a larger set of loyalties than this, as reflected in an earlier piece about our duties to future generations.

For further reading:

A post on whistleblower policies and procedures.

Other ways to use behavioral ethics knowledge and ideas to upgrade your C&E program.

And here’s the agenda for the Thomson Reuters Corporate Whistleblowing Forum being held next month in NYC, at which I’ll be speaking.