Question 1: The Singapore Code of CG advocates the disclosure of company whistle-blowing practices and procedures. Should employees have a duty to blow the whistle on unethical or illegal acts? Introduction
In recent years, fraud cases in Singapore have increased from 3.8 in 2008 to 9.0 in 2011 (KPMG 2011). One of the significant avenues to uncover such cases would be whistle-blowing by the employees. Indeed whistle-blowing does play a huge part in the governance of the corporate world and society; by advocating the disclosure of company whistle-blowing practices and procedures, the Singapore Code of CG implies that employees are under expectations to whistle-blow. It is then debatable whether employees indeed have the duty to comply with such expectations. Whistle-blowing, defined as “the disclosure by organization members (former or current) of illegal, immoral or illegitimate practices under the control of their employers, to persons or organizations that may be able to affect action”, often constitutes various controversial dilemmas (Near & Miceli 1985, p. 4). Employees have to consider among a range of factors such as their ethical obligations, their loyalty to their companies and the consequences they would face before they decide whether to whistle-blow. These decisions would in turn have a direct effect on for example the fraudster, the company, and the community which has been compromised by the fraud involved, to say the least. Thus, to effectively evaluate an employee’s duty to whistle-blow we would first focus on the employee’s ethical duty from the perspectives of the consequence based egoism, utilitarianism and virtue theories, as well as the duty based justice and Kantianism theories. We would then look at other factors that would affect their perception of their duty, or factors that would cause their perceptions to waver, such as their societal culture and company culture. Thereafter we would look at the protocols facing whistleblowers in an attempt to reduce the negative impacts on both organization and whistle-blower.
Whistle-blowing often encompass complex ethical issues that would fetch a wide range of viewpoints and perspectives (Tsahuridu & Vandekerckhove 2008). To narrow it down, we would evaluate the question based on the consequential and duty based theories as mentioned above. Egoism
Ethical egoism is a consequence-based theory that sees a situation as ethical when it maximizes one’s self-interest, regardless of whether it harms or benefits others (Mallin 2010). Thus, whether employees have a duty to whistle-blow would depend entirely on whether the consequence of the whistle-blowing would lead to the maximization of one’s self interest. In the case of Bradley Birkenfeld, an ex UBS Banker who reported UBS’s tax evasion schemes to the authorities despite having participated in it, thus landing himself home arrest and a $104 million reward in return, under the egoism perspective, had an ethical duty to whistle-blow, as the $104 million reward would mean maximizing his own self-interest even with the home arrest in place (Palan, Murphy & Chavagneux 2010). On the other hand, if there was no substantial monetary reward given, Bradley Birkenfeld would not have the ethical duty to whistle-blow, since landing himself home arrest does not maximize his own self-interests. As self-interests can be weighed and measured relatively more easily as compared to for example a community with various stakeholders, the ethical duty of an employee to whistle-blow based on maximization of self-interest can be determined in a relatively straightforward manner based on the egoism perspective. Utilitarianism
Utilitarianism on the other hand, conflicts with the egoism’s perspective of moral obligation to the self by focusing instead on moral obligation to the community. It views a situation as ethical if the consequences rising from it allows all stakeholders within the community to...
Please join StudyMode to read the full document