Whistleblowing is a sensitive topic in any business, with potentially significant ramifications for both the whistleblower and the business alike. Some companies have a whistleblowing policy in place which lays out the procedures to be followed, the protections to be afforded to whistleblowers, and whether whistleblowers will be rewarded.
Perhaps the most important reason to have such a policy is that its existence signals to employees, customers and other stakeholders that the business takes a strong stance against unethical and illegal activities. In the small business context, a formal whistleblowing policy and tools such as dedicated hotlines and e-mails may not be necessary provided the small business owner and senior managers are accessible and have an open-door policy. Ideally, small business owners should encourage their employees to come to them first instead of whistleblowing to an external authority or regulator.
This gives the business an opportunity to deal with the matter and assess whether external parties need to be notified or consulted. Internal whistleblowing assumes there is a willingness and ability to do the right thing on the part of senior management and the small business owner. It is when this trust does not exist that employees feel compelled to go outside the business. In some instances, the small business owner may find themselves in a situation where whistleblowing centers on their own actions or those of family members who are involved in the business.
The instinct for self-preservation may result in defensive steps to sweep matters under the rug or silence whistleblowers through intimidation and other means. Whilst this may maintain secrecy and prevent misdeeds from being revealed in the short term, it sets a bad precedent by creating the impression that the small business owner or their family members can act with impunity. Employees may then be encouraged to be similarly underhanded in their business dealings, including putting their own interests ahead of the business.
The collective improper conduct is likely to put the business at risk in the long term. Small business owners may find themselves blowing the whistle on business partners or government departments (e.g. where there has been an irregular tender process). They should take courage from the Protected Disclosures Act 26 of 2000 Protected Disclosures Act South African legislation specifically designed to protect whistleblowers.
Small business owners can also approach organizations such as the Open Democracy Advice Centre and Transparency International Protected Disclosures Act for advice and support.