When Do You Speak up? Listen up? Whistleblow?
Professor Catriona Paisey, University of Glasgow; James Barbour, Director, ICAS Policy Leadership; and Ann Buttery, Head of Ethics, ICAS Policy Leadership |
Trust is the key to the long-term sustainability of organizations. To ensure trust, there is a need for organizations to engender an ethical culture where the integrity of the organization’s employees is seen to transcend all other business objectives and strategies.
Encouraging individuals to “speak up” if they encounter ethical issues and empowering them to have the confidence to promote good behavior are vitally important in engendering an ethical culture within organizations.
The Institute of Chartered Accountants of Scotland’s (ICAS’) The Power of One business ethics initiative calls on all Chartered Accountants (CAs) to place ethical leadership at the heart of their professional responsibilities. The ICAS publication, The Power of One – Personal Responsibility and Ethical Leadership, stresses that “CAs can be found in all walks of life and must take personal responsibility for the important role they have to play in business and society”. It states, “Individuals, and particularly CAs, should have the confidence to speak out and influence the culture of organizations in which they work.” And, “Robust challenge must be seen as healthy and positive in relation to organizational culture. People need to take the lead and be able to speak their mind, within reason, for the good of the organization. “Challenge” should not be resented”.
The Power of One places ethical leadership at the heart of what it means to be a CA, but ICAS recognizes that speaking up is not always easy or appreciated. ICAS, therefore, decided that it is important to understand the types of situations ICAS members may find themselves in, and how they deal with ethical dilemmas, in order to be able to provide effective professional guidance and support.
ICAS commissioned a two-stage research project examining how ICAS members respond to ethical dilemmas and recently published two research papers reflecting the results of this project.
The research captures an understanding of experiences of dealing with ethical issues from the individual’s perspective, rather than from the viewpoint of the organization. Whilst organizations might have speak-up/whistleblowing policies in place, there are important questions around “do the policies work in practice?”. The research allows better understanding of ethical problems encountered and how individuals dealt with those concerns: did they report their concerns internally or externally? What support was there for the individual? What led individuals to feel they had to report externally?
In the research, “speak up” is defined as speaking up internally within an organization, “listen up” is defined as being listened to if someone speaks up and “whistleblowing” is defined as speaking up externally, where information is communicated outside of the organization, for example to government agencies or the media.
The first of the two research papers documents the results of the first stage of the project, which consisted of a review of academic literature on speaking up, listening up, and whistleblowing; ethics; and organizational culture, which then formed the basis of a questionnaire survey of ICAS members. For the second stage of the research, ICAS members were interviewed to gain a deeper understanding of their ethical dilemmas and actions, and, in particular, their speak up, listen up and whistleblowing responses to those dilemmas.
The research found that CAs are likely to encounter ethical dilemmas throughout their careers, either of a technical and/or behavioral nature—two thirds of respondents had encountered an ethical dilemma. Technical dilemmas reported mainly relate to accounting irregularities, fraud, theft and bribery, taxation, auditing, bonuses, incentives and executive pay. Behavioral issues relate mainly to bullying, pressures from managers and clients, and work pressures relating to workload or work-life balance issues.
This was an interesting finding as prior research had reported mainly on technical issues. It is now clear that many accountants experience behaviors that are of concern, and they reported them more frequently than was found in previous research. When encountering an ethical dilemma, most CAs speak up internally within their organizations but with varying degrees of success. Whistleblowing externally is generally rare and a matter of last resort.
Age and career stage were noted as being significant with interviewees believing that it was more likely that they would encounter issues later in their careers because of the nature of the roles they held—but also that it became easier to be taken seriously and to challenge issues if they were more experienced, and especially if they had financial security.
CAs believed that being able to speak up is an important part of an effective organizational culture, allowing issues to be dealt with at the earliest opportunity before they escalate. The research reports recommend that organizations of all sizes emphasize their behavioral expectations; make their speak up policies more visible; and establish a supportive environment where speaking up, however major or minor, is viewed as valuable to the organization rather than being regarded as troublesome.
The importance of listening was also emphasized but the research found that listening was not as deeply embedded as speaking up. If someone speaks up but nobody listens, then speaking up will not be effective. There is also a need for “active” listening—effective listening involves not only listening but also acting on what has been heard by investigating the issue. Where possible, organizations should be transparent about the instances of speaking up and the outcomes of investigations, and provide evidence of action being taken, so that people can have confidence that the raising of concerns is valued by the organization.
CAs also reported that, generally, there are a variety of support mechanisms in place in professional practice, but they often feel more isolated and “lonely” once they leave professional firms to work in other sectors. The importance for individuals to maintain a professional network for support is, therefore, noted by the research, and it recommends that ICAS, as a member body, consider how it can support its members through facilitating networks, providing education and training in how to approach ethical dilemmas and how to deal with different leadership styles, bullying and intimidation, and an ethics mentoring scheme. ICAS is planning to implement these recommendations in order to support its members.
The research reports not only document the “real-life” experiences of ICAS members who have faced ethical dilemmas, and the advice CAs give to individuals to help them deal with ethical dilemmas, but also provide policy recommendations for organizations, professional accounting firms, and professional accountancy organizations.
Whilst this project draws on the experiences of ICAS members, we believe the research findings and recommendations are also relevant to the wider business community. We hope that the research will help embolden individuals to speak up if they encounter ethical issues within their organizations, and also help inform about the vital importance of effective speaking up and listening up mechanisms to ensuring a successful organizational culture.
The questionnaire survey was distributed by email to 18,700 of ICAS’ 21,000 members in 2017, with 651 responses received. The respondents were representative of the total membership of ICAS as regards gender, country location and work sector.
The majority of respondents were based in the UK (84%), a small proportion (9%) from Australia, Canada and the US, and the remainder (7%) based in various other countries across the world.
15% of respondents were 34 years old or younger, 65% between the age of 35 and 64, and 20% were 64 years of age or older. This demographic is in line with expectations suggested by the literature review, which indicated that those most likely to experience difficult dilemmas are those at the mid and later career stages, with the challenges especially great for those in mid-career who have yet to accumulate the experience of more senior accountants.
30% of respondents associated with an accounting/auditing firm, 13% with banking/ insurance/financial services companies, 7% with energy (including oil and gas) companies, 7% with manufacturing firms, 4% with academic institutions, 3% in IT related firms, 3% in construction firms and 3% in public authorities/organizations, among others.