The annoying tattletale in the schoolyard may have given them a bad name, but whistleblowers are usually good people, struggling to make the right choice. Most often, they’ve stumbled upon information rather than gone about deliberately rooting through company affairs, looking for dirt to report on.

“I personally think that many whistleblowers would prefer not to know this kind of damaging information. It’s just fallen into their laps and they’re struggling with what to do with it,” says Paul Fiorelli, Professor of Legal Studies and Co-director, Cintas Institute for Business Ethics, Xavier University.

“These are very decent people,” he says. “And I think it’s unfortunate that we taint them as the rat, the snitch, the tattletale.” Whistleblowers often take great risks in coming forward with information and, until very recently, there has been very little incentive for them to report wrongdoing, aside from their own desire to do the right thing.

Here's one way to encourage internal whistleblowing: Download this Whistleblower Hotline Poster and put it up to show that you want employees to come forward with concerns.

Hard Choices

Whistleblowers have two fears: retaliation and managerial inaction, explains Fiorelli. There are laws that protect against retaliation, but if a report of wrongdoing is stalled at the managerial level, the whistleblower sits in limbo. “They’re afraid that they’re going to risk their careers, risk their livelihoods, and nothing will happen."

Despite these fears, people still do blow the whistle on misconduct. “I think they feel that it’s the right thing to do,” says Fiorelli. “I think that the information has fallen on their lap, and oftentimes they’d prefer not to know it, but now that they know it, they have a moral dilemma. Do I come forward with that information or do I ignore it?”

The ideal solution is to report the problem within the organization, either through the company helpline or to an ethics or compliance officer, says Fiorelli. But these mechanisms are not always in place, and whistleblowers are sometimes left to fend for themselves in a state of fear and uncertainty.

Filling the Vaccuum with Trust

Fiorelli sees the need for an employee to report misconduct externally as a management failure. “Management has failed to create an environment of trust where people do feel comfortable coming forward.”

An employee who feels that things don’t “seem right” should be able to report that internally and trust that the company will take it seriously, investigate and take whatever action is necessary, he says. Instead, many organizations have what Fiorelli calls a vacuum. “What I encourage companies to do is to fill that vacuum up with trust… If you tell me about a potential problem, I’m going to investigate it, take appropriate action, and complete the circle by giving you as much information as possible,” he says.

Incentives are No Magic Solution

With the new amendments to the Dodd-Frank Act that allows a reward for whistleblowers, whether they report internally or externally, there may be more incentive for people to come forward with information. But Fiorelli doesn’t see this as a magic solution, as he doesn’t see the reward as the true reason whistleblowers report.

“The Dodd-Frank Act just gives recognition that many people will be impacted by whistleblowing and this is to encourage them to go through the effort,” he says. Given the possible ramifications for the whistleblower, the reward can mean that doing the right thing doesn’t always have to mean financial ruin. And the recognition that whistleblowing is desirable and worthy of reward may go a long way in dispelling the stigma that has surrounded it.

“I personally think that the 2002 Time Magazine people of the year, Cynthia Cooper of WorldCom, Colleen Rowley of the FBI and Sherron Watkins of Enron, put the most positive face on whistleblowing that we’ve seen,” says Fiorelli. “A new generation of workers may think about whistleblowing in a more positive light because of that.”