Behavioral Ethics and Whistleblowing

In A Behavioral Economics Perspective on Compliance, Shahryar Banuri (University of East Anglia) “reviews the behavioural economics perspective on compliance with rules (broadly) and with whistle-blowing and antitrust compliance (more specifically) culminating in a series of recommendations for organizations seeking to improve compliance and detection of potential infringements of the law. [He focuses] on four main points:
“First, is the importance of voluntary compliance (as opposed to enforced compliance). This is important because it carries a broader set of actions than enforced compliance (which typically pertains to behaviour that is observable). Highlighting non-pecuniary rewards, such as benefits to society, reputational gains, and career impacts, are critical.”
The point about career impacts is particularly noteworthy. Too few business people fully grasp what a violation or, conversely, good deed, can do to one’s career. Making up this knowledge gap should be part of a C&E officer’s remit.
“”Second, is the importance of perceptions and beliefs. Focusing on whistleblower protections and correcting beliefs regarding the risks (and potential losses) associated with reporting are critical.”
This too is quite important, and I believe should be the focus of all C&E programs – meaning continuous education around these issues through training and communication. Among other things, using accounts of real events can lead to better understanding of what the risks really are.
“Third, beliefs are typically the result of social norms: shared expectations of behaviour. Collecting information on norms and correcting misperceptions is an important way to increase compliance.”
The analysis is similar to that concerning and correcting employee beliefs. But I would also add that risk/culture assessments can be used for these purposes.
“Fourth, selecting the right workers: Selecting workers with strong preferences for compliance (those that are more pro-socially motivated) allows for increases in compliance without the need of strong monetary incentives.”
The importance of this goes beyond whistleblower protection – and indeed as the subject of last week’s post

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