Whistleblowing practices benchmarking for top-ranking public and private employers

1. Whistleblowing practices benchmarking for top-ranking public and private employers Mara Stan, University of Bucharest, Sociology dept. Key Words: Whistleblowing, integrity, compliance, corporate governance, benchmarking, accountability, cognitive dissonance

2. Whistleblowing, simply put • To signal corrupt, illegal, fraudulent or harmful activity • Movies starring whistleblowers: Marlon Brando in “On the Waterfront” (1954), Jack Lemmon in “The China Syndrome” (1979), Al Pacino in “Serpico” (1973), Meryl Streep in “Silkwood” (1983), Julia Roberts in “Erin Brockovich” (2000), Russell Crowe in “The Insider” (1999), Will Smith in “Concussion” (2016) • Viewed ambivalently: correction or optimization • Vs. retaliation or treason (breech of trust)

3. Rational, emotional, visceral • Cost-benefit analysis and rational planned behavior • Reactions of indignation, outrage, moral and cognitive dissonance generated by trespassed values or infringed reciprocity expectations • Typology: “misconduct for material gain (including bribery, corruption and theft), improper or unprofessional behavior, negligence, incompetence, and waste or mismanagement of organizational resources” (Teo & Caspersz, 2011, 240).

4. Research objectives • Examine disclosure mechanisms endorsed through whistleblowing regulations (strategies, policies and procedures) that organizations in both public and private sectors implement: • Challenges, hurdles • Use of monitoring and follow-up mechanisms • Analyze processes by which whistleblowing is converted to a competitive advantage in the area of employer branding

5. Research questions • Are there standardized whistleblowing regulative prescriptions, valid across both public (including SOEs) and private sectors? How divergent or similar are they between sectors? • How are the coordinates of the whistleblowing procedure built, in terms of scope, applicability, addressability (target audiences), certification, training, accessibility, affiliation and institutional partnership, areas of responsibility, action plans and follow-up? • What updates or up-and-coming trends do public and private employers pursue, in terms of whistleblowing procedures and practices? • How can procedures help solve whistleblowers’ dilemmas and overcome barriers to misconduct disclosure?

6. Antecedents to whistleblowing • Impact of bystanders (diffused responsibility, path dependency, NIMBY syndrome) • Wrongdoer power status • Reporting channel administration (internal vs. outsourced) • Perceived personal responsibility • Perceived seriousness of trespass • Perceived personal cost associated to misdemeanor reporting • Organizational commitment acts as U-shape moderator (mid-level – more probable to denounce)

7. Impact of organizational culture & climate • Overly cohesive organizational cultures can ostracize or blackball whistleblowers described stereotypically as traitors, “moles”, “narks”, “canaries”, „tattlers” or “backstabbers” • Disloyal dissenters breed contempt, mistrust, skepticism, discontent, deviance and disharmony • Vulnerable to humiliation, isolation, labelling and social exclusion • Would-be denouncers’ apprehension, anguish, audience inhibition • Organizational justice and concepts of moral responsibility, moral cognition and moral agency – accountability that transcends juridical blame, guilt or liability

8. Guilt • Responsibility for a crime or for doing something bad or wrong • A bad feeling caused by knowing or thinking that you have done something bad or wrong • The fact of having committed a breach of conduct especially violating law and involving a penalty • feelings of culpability & self-reproach especially for imagined offenses or from a sense of inadequacy (Oxford Dictionary)

9. Responsibility • The state of being the person who caused something to happen • A duty or task that you are required or expected to do • Something that you should do because it is morally right, legally required, etc. • Personal quality of being committed, reliable, trustworthy (Merriam Webster Dictionary)

10. Liability • The state of being legally responsible for something : the state of being liable for something • Something (such as the payment of money) for which a person or business is legally responsible (pecuniary obligation, debt) • One that acts as a disadvantage: drawback, shortcoming (Oxford Dictionary)

11. Denouncers’ protection: legislative provisions • Law 571/2004 for “the protection of personnel from public authorities, public institutions and other entities that signal law infringement” • Belongs to anti-corruption package: together with Law 78/2000, 161/2003, 7/2004 (code of conduct for public functionaries), Law 53/2003 (decisional transparency), 544/2001 (public information access) • Only applicable to public staff – they must prove responsibility in providing hints, clues and data on the suspected wrongdoing that bypasses efficiency, anti-discrimination and transparency • Defended through labor code and witness protection legislation

12. Methodology of online research • Benchmarking-based comparative analysis, performed on: • 57 private MNEs featured in top employer rankings, yearly issued by: • Dutch-based Top Employers Institute – author of Premium Employer ranking and • German Trendence Institute – author of Graduate Barometer • 20 ministries from the current government structure • 9 most profitable SOEs across four economic sectors: energy (Romgaz, Transgaz, Electrocentrale Bucureşti, Nuclearelectrica), industry (Uzina mecanică Cugir, Carfil), transport (CNADNR, Aeroporturi Bucureşti) and forestry (Romsilva)

13. Analytical categories • Addressability (target audience) • Accessibility (communication means) • Coverage – topics of misconduct • Statistics on reporting • Source (local, regional or central headquarters) • Core principles and institutionalization mechanisms Data collection - during January – June 2016 NVivo software for theme coding, concept mind maps, word clouds, word trees and coding comparison queries Tool of qualitative data mapping and data mining

14. Integrity denouncement provisions across Ministries

15. Integrity denouncement provisions across Ministries – II

16. Integrity denouncement provisions across Ministries – III

17. Conclusions for Ministries • Half of Romanian Ministries feature no reference or contact information on the topic of integrity denouncement. • Others indicate only a standard form for miscellaneous petitions • Sporadic ethical codes • Archived ethical reports that feature blank sections, such as the case of Ministry of Economy, Commerce and Business Environment Relationships

18. Conclusions for Ministries - II • Only the Ministry of Work, Family, Social Protection and Elderly Persons complies with good practices valid also for private MNEs regarding communication and denouncement processing regime • A comparative policy research by Amnesty International (Alistar et al., 2015) Romania adopted specific legislation regarding integrity denouncers’ protection in the state sector (absent in Bulgaria, Czech Republic, Estonia, Hungary, Ireland, Slovakia, Italy and Latvia) • Still, 13 years after its adoption, no whistleblowing policy is communicated on official Ministries websites

19. Output indicators Self-assessment recordings for whistleblowers’ protection - part of anti-corruption action plan • Number of petitions regarding law infringement, • Types of normative trespassing • Number of internal regulations harmonized with national legislation • Number of specially assigned persons to handle petitions • Subordinated institutions in which there is implemented a mechanism for the integrity denouncers’ protection

20. Output indicators - II • Number of administrative measures taken to alleviate consequences of denounced infringements • Number of denounced workplace reprisals • Number of complaints that reached the court • Number of cases wherein integrity denouncers received compensation • Number of activities for the professional training of staff regarding integrity denouncements • Number of trained employees

21. Poor corporate governance in SOEs • Profitability among the sample of most successful SOEs is uncorrelated with integrity denouncement policies • In 2015, 3 employees of CNADNR who denounced administrative wrongdoing to the media were subjected to retaliation by their managers, who suspended their labor contracts (Toma, 2015) • Confidentiality is ensured only when the whistleblower denounces his/her immediate superior or someone with control, audit or assessment attributions concerning the denouncer’s work • Anti-leak provision deterring denouncement: Any other intervention other than intimation to immediate superior, disciplinary committee or prosecutor is considered infringement of contractual term and leads to denouncer’s sanctioning

22. Complaints, grievance and denouncement • Complaints on quality of products and services (usually forwarded to customer relationship management (CRM) or quality assurance (QA) departments • Grievance, wherein the employee reports dissatisfaction about employment terms and conditions, position or career track • Contrary to plaintiffs, integrity denouncers are not necessarily affected directly by the presented situation

23. Conclusions • Need to ensure open governance and transparency in the delivery of quality public: sustainably performance-centric and citizen-oriented • Procedures of abuse detection and disclosure contribute to organizational health and success, in terms of equity, integrity and meritocracy • Formal policies need to be enhanced by internalized legitimacy and social acceptance

24. Discussed findings • Workplace setbacks can be corrected not only by downstream, top-down intervention from management, but also by lateral, same-level cooperation and coordination • Whistleblowing as ethical crowdsourcing - form of organizational citizenship • Business ethics model based on zero tolerance and zero waivers for misdemeanor • Co-ownership for shared accountability – leadership role

25. Implications • Procedures cannot be expediently imitated and migrated from private onto public entities to form makeshift or jigsaw solutions • To raise public awareness on the need for whistleblowing as pro-social mechanism • More emphasis on feedback & follow-up • Update and upgrade official websites to include whistleblower-friendly provisions

26. Implications II • Counselling, training, mediation and arbitration techniques, dedicated ombudsperson • Hybrid handling model: outsourced transmission of petitions, internal processing and resolution on complaints • Ethical behavior section in every job description requiring each employee’s written agreement • Intensified internal communication on workplace ethics and wrongdoing reporting, disseminated by handbooks, e-learning guides, Intranet, leaflets, newsletters, internal magazines