Whistle blowing and the Sarbanes-Oxley Act

Stakeholders are those parties who are affected by the actions or activities of an organization in one way or another. Stakeholders include employees, customers, shareholders, suppliers, community, lenders and other parties with particular interests in the organization.

Characteristics of a whistleblower

A whistleblower brings to light alleged dishonesty, misconduct or illegal activity occurring in an organization. A whistle-blower speaks out with the intention of exposing the misconduct to the public or concerned bodies for necessary action to be taken. 

The alleged misconduct may be categorized as unethical conduct, a violation of law, rule or regulation or a threat to public interest (Bjørkelo et al., 2011).  A whistleblower may make the allegations internally to people with authority within the organization, or externally to law enforcement agencies, groups, regulators, groups or media outlets that are concerned with the issues raised forth

Whistle blowing requires an ethical and moral calculus.  This must come with emotional baggage that sways an individual on decision making.  A Whistleblower is fearless and honest.  The individual must be brave and courageous enough to expose alleged wrongdoings.  A whistleblower has the tenacity and a fighting spirit that allows the individual to take on the challenge or long a drawn out process that may be characterized by many risks. A whistleblower is a determined individual with the drive to go all the way regardless of the potential matter the consequences.

 The reasoning is also an important ingredient because whistleblowers may be required to undergo a process to scrutinize and assess the allegation. Thus, allegations must be supported with facts.  Another significant key characteristic is the ability to combat retaliation.  Whistleblowers may face retaliation, alienation and public scrutiny before and justice is obtained. This is a long, tedious and vigorous process. Employers suspend a whistleblower or threaten to fire the whistleblower. The ability to fight is an important one in this process as the stress involved in whistle blowing can be huge. As such, individuals may remain afraid to expose misconducts in fear that others will not believe them if they speak out (Bjørkelo et al., 2011). 

Barclays Bank plc case

In June 2016, an employee at Barclays bank blew the whistle concerning a senior executive Tim Main.  Tim Main is a well-regarded banker who formerly worked for JP Morgan for 34 years.  He was hired by Barclays bank to help turn the organization around as the chairman of investment banking.  Two anonymous letters sent by the whistleblower concerned issues of a personal nature about the executive’s past and put into question the suitability of his recruitment to the organization.  The letters made unpleasant allegations of the individual (Kollewe & Ruddick, 2017).

Effects of whistle blowing

The whistle blowing act raised important concerns on the hiring of Tim Main. The act triggered increased attention from the investors. Bank regulatory authorities also questioned if the institution’s leaders knowingly hired Tim Main despite his record at JP Morgan. As a result, Chief Executive Jes Staley instructed the organization’s security team to track down the author of the letters believing the letters to be unfair attacks. However, the board took the matter seriously when a second whistleblower raised the same matter. An investigation was ordered, and the Chief Executive was reprimanded and reported to UK banking watchdogs.  The anonymous whistle-blowers are likely to face retaliatory actions from the bank’s executives.  However, the law protects whistle-blowers’ desire to remain anonymous particularly when the employee reasonably believes that the disclosure is made in the public interest.

Whistleblower was justified in reporting the issue

The whistleblowers were justified in reporting the issue to the board.  This is because they called attention to genuine issues by decision makers. In the case, the employee expressed concern about possible wrongdoing by the management, thus providing the board an opportunity to look into and take corrective action.  Given that one member of the management team is the focus of the whistle blowing; any report to the management would most likely be ignored.  Based on the reaction, the management would be unresponsive and hostile to the whistleblower’s concerns.  The actions taken by the whistleblower would ensure that the organization handles the problem more effectively.  The action is justified as Whistleblowers do call attention to genuine abuses of power or rules by decision-makers in organizations.

Extent to which the individual would be protected

 The Sarbanes- Oxley federal law was created to protect whistleblowers in publicly traded companies who report violations (Sarbanes, 2002). The Act prohibits publicly traded firms from discriminating employees who assist in providing information.  The whistleblowers in Barclays Plc would be protected under this law because the chief executive has made attempts to uncover their identity.  This means that the anonymous whistle-blowers are likely to face retaliatory actions from the bank’s executives (Earle & Madek, 2007).  However, the Sarbanes-Oxley federal law protects whistle-blowers’ desire to remain anonymous particularly when the employee reasonably believes that the disclosure may be trigger reactions. When a whistleblower identifies the threat, he should report it and state his concerns. This has been successful as the court prevented the Chief Executive from making further attempts to discover the identity of whistleblowers in the organization.

References

Bjørkelo, B., Einarsen, S., Nielsen, M. B., & Matthiesen, S. B. (2011). Silence is golden? Characteristics and experiences of self-reported whistleblowers.

Earle, B. H., & Madek, G. A. (2007). The Mirage of Whistleblower Protection Under Sarbanes‐Oxley: A Proposal for Change. American Business Law Journal, 44(1), 1-54.

Kollewe J & Ruddick G. (2017) Barclays whistleblower case sparks calls for more protection. 

Sarbanes, P. (2002, July). Sarbanes-oxley act of 2002. In The Public Company Accounting Reform and Investor Protection Act. Washington DC: US Congress.

Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in write my essay online if you need a similar paper you can place your order from write my essay for me services.