Why we need new laws for whistleblowers
The 1998 Public Interest Disclosure Act protecting whistleblowers was a pivotal moment for UK governance. But even as it was being passed, elsewhere the seeds of the Post Office scandal were about to be sown...
…So how can we make a new version of the Act relevant to the age of AI and the gig economy – and ensure it really has teeth? Ryan Herman meets the experts to find out
Consider the following situation. You’ve decided to send an anonymous letter to your head of HR raising a serious concern about wrongdoing at your place of work. You are scared that if you put your name to it, the likeliest outcome is that you lose your job.
The complaint is escalated to the board, which then decides that rather than deal with the issue the company needs to circle the wagons and root out any dissenting voices. So the letter is put through an AI tool used regularly by company employees to tidy up presentations, do spellchecks and provide summaries of lengthy reports.
That piece of technology can instantly identify the letter writer because it recognises their style.
This is just one of many concerns about new technology raised by Sybille Raphael, Legal Director at Protect, the UK’s whistleblowing charity. “Protect was founded in 1993, at a time when whistleblowers were seen as rats and snitches,” says Raphael.
But in 1998, something happened to change that perception: the UK became the second country in the world to pass a law that protected whistleblowers, more than a century after the US.
Raphael rightly takes pride in Protect having been a driving force behind that law. “It’s one of the few pieces of employment law that have cross-party support because whistleblowing is not just good for workers, it’s also good for business,” she says.
The cost of not listening
Put aside for one moment the human cost, and consider the fortune that would have been saved had the Post Office listened to the whistleblowers warning about the Horizon system’s defects. Protect has estimated the cost as being in the hundreds of millions of pounds – although it admits this is a conservative estimate.
“To date, we have advised more than 60,000 people via our helpline,” says Raphael. “We talk to whistleblowers every single day, and we advise them both on how to raise their concern in the most effective way, but also on what their rights are and what they can do if they’re being punished for blowing the whistle.
“About 70% of whistleblowers say that rather than being thanked for bringing a risk to the attention of their employers, they've been punished for it”
Sybille Raphael, Protect
“Our stats are pretty damning. About 70% of whistleblowers say that rather than being thanked for bringing a risk to the attention of their employers, they’ve been punished for it. That can mean being demoted, taken off a project, dismissed or forced to resign.
“Another really depressing stat is that 40% of the whistleblowers who come to us say they’ve just been ignored, so the employer isn’t even bothered to look into what’s going on to check whether it’s happening or not.
“There is a natural instinct to be defensive when somebody brings a complaint. If I was told there was a problem in my team I would think, ‘I recruited my team, I trained my team. I love my team. You must be the problem!’”
Raphael believes a whistleblower can be a company’s best risk-management tool. Yet, while the 1998 Act was a landmark moment, she argues we need new legislation to reflect the modern world of work, including AI, along with the rise of the gig economy. This should start with the UK matching a new EU directive, under which employers with more than 50 workers are obliged to listen to whistleblowers.
“The previous government had undertaken a review of the whistleblowing legislation,” says Raphael. “They didn’t publish it, but it’s there. I think everyone agrees that we need to update our framework. I’m hoping that the government will find the headspace and the time to really tackle it, because it’s long overdue.
“One of our key recommendations relates to governance. You need a board member in charge of whistleblowing who’s a critical friend of the whistleblowing function and can be a very strong ambassador for speaking up within the organisation. There’s already a model for that in the financial sector. Governance is absolutely essential to whistleblowing, and whistleblowing is absolutely essential to governance.”
AI and ethics
In 2020, ICAS joined forces with Protect to provide members and students with access to an independent and confidential helpline offering free advice for anyone considering whistleblowing. That followed the previous year’s survey of the ethical dilemmas that members face. Last year, ICAS published a new survey on ethical leadership as part of the Shaping the Profession programme (see results below).
Consider the following situation. You’ve decided to send an anonymous letter to your head of HR raising a serious concern about wrongdoing at your place of work. You are scared that if you put your name to it, the likeliest outcome is that you lose your job.
The complaint is escalated to the board, which then decides that rather than deal with the issue the company needs to circle the wagons and root out any dissenting voices. So the letter is put through an AI tool used regularly by company employees to tidy up presentations, do spellchecks and provide summaries of lengthy reports.
That piece of technology can instantly identify the letter writer because it recognises their style.
This is just one of many concerns about new technology raised by Sybille Raphael, Legal Director at Protect, the UK’s whistleblowing charity. “Protect was founded in 1993, at a time when whistleblowers were seen as rats and snitches,” says Raphael.
But in 1998, something happened to change that perception: the UK became the second country in the world to pass a law that protected whistleblowers, more than a century after the US.
Raphael rightly takes pride in Protect having been a driving force behind that law. “It’s one of the few pieces of employment law that have cross-party support because whistleblowing is not just good for workers, it’s also good for business,” she says.
The cost of not listening
Put aside for one moment the human cost, and consider the fortune that would have been saved had the Post Office listened to the whistleblowers warning about the Horizon system’s defects. Protect has estimated the cost as being in the hundreds of millions of pounds – although it admits this is a conservative estimate.
“To date, we have advised more than 60,000 people via our helpline,” says Raphael. “We talk to whistleblowers every single day, and we advise them both on how to raise their concern in the most effective way, but also on what their rights are and what they can do if they’re being punished for blowing the whistle.
“Governance is absolutely essential to whistleblowing, and whistleblowing is absolutely essential to governance”
Sybille Raphael, Protect
“Our stats are pretty damning. About 70% of whistleblowers say that rather than being thanked for bringing a risk to the attention of their employers, they’ve been punished for it. That can mean being demoted, taken off a project, dismissed or forced to resign.
“Another really depressing stat is that 40% of the whistleblowers who come to us say they’ve just been ignored, so the employer isn’t even bothered to look into what’s going on to check whether it’s happening or not.
“There is a natural instinct to be defensive when somebody brings a complaint. If I was told there was a problem in my team I would think, ‘I recruited my team, I trained my team. I love my team. You must be the problem!’”
Raphael believes a whistleblower can be a company’s best risk-management tool. Yet, while the 1998 Act was a landmark moment, she argues we need new legislation to reflect the modern world of work, including AI, along with the rise of the gig economy. This should start with the UK matching a new EU directive, under which employers with more than 50 workers are obliged to listen to whistleblowers.
“The previous government had undertaken a review of the whistleblowing legislation,” says Raphael. “They didn’t publish it, but it’s there. I think everyone agrees that we need to update our framework. I’m hoping that the government will find the headspace and the time to really tackle it, because it’s long overdue.
“One of our key recommendations relates to governance. You need a board member in charge of whistleblowing who’s a critical friend of the whistleblowing function and can be a very strong ambassador for speaking up within the organisation. There’s already a model for that in the financial sector. Governance is absolutely essential to whistleblowing, and whistleblowing is absolutely essential to governance.”
AI and ethics
In 2020, ICAS joined forces with Protect to provide members and students with access to an independent and confidential helpline offering free advice for anyone considering whistleblowing. That followed the previous year’s survey of the ethical dilemmas that members face. Last year, ICAS published a new survey on ethical leadership as part of the Shaping the Profession programme (see results below).
For best display of graph, please turn mobile to landscape.
“When we’re looking at ethical dilemmas in a basic accounting sense, there have always been pressures in certain instances for accountants to manipulate figures,” explains James Barbour CA, ICAS Director of Policy Leadership.
“When someone is preparing a report they might be asked to take out certain information. It might be that this information is seen as something that could [negatively] impact someone’s view – so without it, would a fair reflection of the situation be provided?
“A chairman or chief executive’s statement may just prefer to focus on the positives, rather than giving a fair, balanced and understandable assessment of how the organisation is performing.
“On the assurance side of things, there might be pressure put on auditors. For example, a company may be in a situation where the directors need to include disclosure of a material uncertainty relating to going concern in the accounts. But the directors might argue that it is not necessary to include this, which can lead to challenging conversations with the auditor.
"For CAs in business, it can be a lonely place to be a CFO or an FD if they are the only person on the board who is subject to an ethics code.”
“When we’re looking at ethical dilemmas in a basic accounting sense, there have always been pressures in certain instances for accountants to manipulate figures,” explains James Barbour CA, ICAS Director of Policy Leadership.
“When someone is preparing a report they might be asked to take out certain information. It might be that this information is seen as something that could [negatively] impact someone’s view – so without it, would a fair reflection of the situation be provided?
“A chairman or chief executive’s statement may just prefer to focus on the positives, rather than giving a fair, balanced and understandable assessment of how the organisation is performing.
“On the assurance side of things, there might be pressure put on auditors. For example, a company may be in a situation where the directors need to include disclosure of a material uncertainty relating to going concern in the accounts. But the directors might argue that it is not necessary to include this, which can lead to challenging conversations with the auditor.
"For CAs in business, it can be a lonely place to be a CFO or an FD if they are the only person on the board who is subject to an ethics code.”
For best display of graph, please turn mobile to landscape.
ICAS updated its Code of Ethics in January this year. As Barbour explains: “The International Ethics Standards Board for Accountants (IESBA) had made revisions to its code in relation to technology, and these were the biggest reason for us updating our code. Although the revisions refer to technology, IESBA placed considerable focus on AI tools during its deliberations.
“For example, we all use Excel, and come to accept that it may have the odd glitch, but we’re nowhere near that in terms of using some of these AI tools – we don’t have that same level of confidence yet, because many of these are very much in their infancy and being updated at pace.
“So we have to ensure that we have appropriate governance controls over the use of these AI tools, that people do monitor the outputs as well to ask: does this look reasonable? They also need to be aware of potential bias. At ICAS we have used a proprietary version of Copilot, which we license, and we have used that to great effect to help us in certain things we do, but human oversight is essential.
“Ethics is something we always want to keep reminding members about – it’s there in our strapline of ‘Ethical leadership since 1854’ – and there’s no better way of doing that than having something which serves as a real and tangible memory front of mind. That’s why it also made sense to have the Post Office scandal as the focus of our (recent) Ethical Leadership Forum – people will get it and understand it.”
“The Post Office scandal was, effectively, a board assessing an IT system, and it didn’t appear as though it fully understood the ramifications. Are we not now in a similar situation, where boards might be assessing the roll-out of AI tools?”
James Barbour CA, ICAS
Indeed, if there is one good thing to come out of the Post Office scandal it is that companies and organisations are taking whistleblowing more seriously – and more of them are reaching out to Protect.
“Recently, I’ve been training a local authority, regulators, charities, all types of other organisations on how to investigate whistleblowing concerns and create a ‘speak up’ culture,” says Raphael. “We discuss how you prevent whistleblowing victimisation, sexual harassment and whistleblowing, ESG [environmental, social, governance] and whistleblowing.”
The past should also serve as a warning for what could happen in the future, adds Barbour: “The Post Office scandal was, effectively, a board assessing an IT system, and it didn’t appear as though it fully understood the ramifications. Are we not now in a similar situation, where boards might be assessing the roll-out of AI tools? And will they properly assess or understand the potential implications of using these tools?
“AI is becoming very prevalent, and is changing rapidly. So how can boards ensure it is being used appropriately, that it is fit for purpose and they’re not inadvertently putting confidential data into the world at large?
“There could be cases in smaller firms where someone might use something like ChatGPT to help them with a client’s business plan projections, and they might be putting that information into the public domain if they’re using it inappropriately.
“That’s what people need to consider before they use AI. Why am I using this tool? Is there any confidential information, and so on? If so, which tools can I use instead? It might mean they need to purchase some specific proprietary tools, rather than just using the free ones.”
One of the discussions at the recent ICAS Ethical Leadership Forum was titled “The ethical implications of new technologies including AI”.
As Raphael concludes, “I find it really interesting to go to these events where the focus is not just whistleblowing, but it’s wider than that. It’s the whole ecosystem around it.”
ICAS updated its Code of Ethics in January this year. As Barbour explains: “The International Ethics Standards Board for Accountants (IESBA) had made revisions to its code in relation to technology, and these were the biggest reason for us updating our code. Although the revisions refer to technology, IESBA placed considerable focus on AI tools during its deliberations.
“For example, we all use Excel, and come to accept that it may have the odd glitch, but we’re nowhere near that in terms of using some of these AI tools – we don’t have that same level of confidence yet, because many of these are very much in their infancy and being updated at pace.
“So we have to ensure that we have appropriate governance controls over the use of these AI tools, that people do monitor the outputs as well to ask: does this look reasonable? They also need to be aware of potential bias. At ICAS we have used a proprietary version of Copilot, which we license, and we have used that to great effect to help us in certain things we do, but human oversight is essential.
“Ethics is something we always want to keep reminding members about – it’s there in our strapline of ‘Ethical leadership since 1854’ – and there’s no better way of doing that than having something which serves as a real and tangible memory front of mind. That’s why it also made sense to have the Post Office scandal as the focus of our (recent) Ethical Leadership Forum – people will get it and understand it.”
“The Post Office scandal was, effectively, a board assessing an IT system, and it didn’t appear as though it fully understood the ramifications. Are we not now in a similar situation, where boards might be assessing the roll-out of AI tools?”
James Barbour CA, ICAS
Indeed, if there is one good thing to come out of the Post Office scandal it is that companies and organisations are taking whistleblowing more seriously – and more of them are reaching out to Protect.
“Recently, I’ve been training a local authority, regulators, charities, all types of other organisations on how to investigate whistleblowing concerns and create a ‘speak up’ culture,” says Raphael. “We discuss how you prevent whistleblowing victimisation, sexual harassment and whistleblowing, ESG [environmental, social, governance] and whistleblowing.”
The past should also serve as a warning for what could happen in the future, adds Barbour: “The Post Office scandal was, effectively, a board assessing an IT system, and it didn’t appear as though it fully understood the ramifications. Are we not now in a similar situation, where boards might be assessing the roll-out of AI tools? And will they properly assess or understand the potential implications of using these tools?
“AI is becoming very prevalent, and is changing rapidly. So how can boards ensure it is being used appropriately, that it is fit for purpose and they’re not inadvertently putting confidential data into the world at large?
“There could be cases in smaller firms where someone might use something like ChatGPT to help them with a client’s business plan projections, and they might be putting that information into the public domain if they’re using it inappropriately.
“That’s what people need to consider before they use AI. Why am I using this tool? Is there any confidential information, and so on? If so, which tools can I use instead? It might mean they need to purchase some specific proprietary tools, rather than just using the free ones.”
One of the discussions at the recent ICAS Ethical Leadership Forum was titled “The ethical implications of new technologies including AI”.
As Raphael concludes, “I find it really interesting to go to these events where the focus is not just whistleblowing, but it’s wider than that. It’s the whole ecosystem around it.”
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