Whistleblower legislation presents a new challenge to crisis management

Law, as well as smartphones acting as undercover news-gathering cameras, means firms have little control over what becomes public

The Uber files, equivalent to a data dump, has focused the public mind on lobbying – the aggressive tactics and political infiltration of a company to achieve market entry.

There has been less focus on the act of whistleblowing itself and the crisis of trust and confidence it causes for companies when their wrongdoing is exposed. Ireland’s own amended whistleblower legislation was recently signed into law by President Michael D Higgins.

According to sailors’ superstitions, to whistle on a boat will bring you bad luck. It is said that the act of whistling causes the wind to feel threatened, and as such, responds to the whistle by mustering up a fierce and threatening storm. The sound of a whistle onboard will strike fear in the saltiest of sailors.

The same is true for any enterprise exposed to public opprobrium and coverage for wrongful actions they never expected to be held accountable for. The inevitable storm means that crisis management plans are fast activated. They’d better be robust, as fighting for a corporate reputation against an insider with right and rights on his or her side is a huge PR task.

Our own Protected Disclosures (Amendment) Bill 2022 sees significant updates to Ireland’s whistleblower regime. These updates build on the protections offered in 2014 under the Protected Disclosures Act. Now, a wider scope of categories of workers will be protected, including volunteers, board members, shareholders and job applicants.

The definition of penalisation is expanded to cover more covert acts, including negative performance appraisals or withholding promotions.

Most notably, the amendments provide for the burden of proof to be on the employer to prove that any alleged act of penalisation against the whistleblower did not occur.

For corporate entities of 50 employees or more, the Bill requires that they establish, maintain, and operate internal reporting channels and procedures for the making of protected disclosures.

Managing risk

The importance of having policies and processes for protected disclosures provides an avenue for the whistleblower to go through prior to contacting external sources such as journalists. Entities will need to be aware of and know how to manage their risks prior to a disclosure.

At least this would give some forewarning before a public outing and the chance to clean up their act in private. For corporate entities without a tested crisis-management plan in place and a strong ethical culture, the emergence on the public stage of a whistleblower can be catastrophic for their reputation.

The new legislation will increase such risks. A robust risk-management and crisis-management plan, tested and reviewed by independent experts, will now need extra attention.

Whistleblower procedures will need to be part of wider corporate reputation strategies, recognising that crisis prevention is the key to corporate health and, indeed sometimes, survival.

For chief executives, chairpersons, and boards of directors working for a company in the eye of a whistleblowing storm, the ability to defend and communicate quickly, assuredly, consistently, and constantly across a team of spokespeople is central to an organisation’s very survival, and sometimes the leadership itself.

Nowhere is the reputation of a company more visible and more vulnerable than in the midst of a crisis

Leadership is often the most important ingredient in a crisis – a CEO who gives communication top priority, who is adept himself or herself in dealing with the challenges of listening and talking, is vital.

Frances Haugen, Edward Snowden, and Chelsea Manning are among some of the most well-known whistleblowers internationally. Most recently, Mark MacGann, the former senior executive and lobbyist turned whistleblower at Uber has leaked over 120,000 documents in what has become known as the Uber Files. The fallout was global.

Here at home, we have local examples. In 2019, ESB employee turned whistleblower Seamus O’Loughlin made ten protected disclosures to the minister for the environment.

Visible and vulnerable

In 2017, two senior employees at Independent News and Media (INM) made separate protected disclosures about the circumstances surrounding the proposed Newstalk bid. No doubt there will be many more major corporates caught in the headlights.

Nowhere is the reputation of a company more visible and more vulnerable than in the midst of a crisis. Corporate privacy is no longer possible when a company fails to act properly, ethically, legally and with a keen eye to all its stakeholders. The whistleblowers’ legislation, as well as the ability of the smartphone to become a 24-hour undercover news-gathering camera, means that companies now have little control over what becomes public and when.

Everything in the way a company acts and communicates today has risks – given the market for news and how it works, the channels used to deliver it, the speed of message to market (formal, informal, verified and unverified), the demand for authenticity coupled with immediacy, real and dangerous threats to the information boundaries of the company (whether through technology glitches, cyber-security lapses, leaks, hacking, whistleblowing, the smartphone’s ability to record a company’s every process and interaction). And while this communications revolution is happening, corporate governance and ethical standards are higher than ever.

Unlike a normal “leak”, whistleblowing is an act for which the act itself speaks. The allegations must be true. Whistleblowing can be weaponised, bringing the house down.

All the experts in the world will advise that it is wiser to prevent a crisis than to handle one

A strong crisis prevention plan and team will ensure that any decision an organisation makes is better placed to withstand the test of public interest and scrutiny. If there is wrongdoing, corporate recovery requires honesty and communication as a prelude to full rehabilitation.

A lot of work goes into containing the damage, stabilising the situation, restoring normality (even if that is a new normality) as soon as possible and then dealing with the process of repair which is so often necessary.

All the experts in the world will advise that it is wiser to prevent a crisis than to handle one. “Do no harm” and the enterprise will not have to worry about whistleblowing. Manage the risks, test the crisis-communication plans, have good, independent PR counsel before a doubtful decision or initiative. In other words, run a tight ship.

Ita Gibney is chairman of Gibney Communications Limited.