managers in either private or public sector companies would be pleased to have a whistleblower.
However, requirements of the modern economy differ very much from the recent semi-criminal past and
demand that all employees be honest towards company matters and themselves. Employees are expected
to inform management of all problems, errors or mismanagement in a timely manner, as concealing such
issues could cause substantial material and moral losses.
Grievances can be of two types. An internal signal calls for internal investigation. External signals are
and a complainant has no choice other than knocking at the doors of influential mass media.
On August 10, 1978 three teenage girls died in Indiana, when their Pinto Ford car was struck from
burned alive, because due to a hasty release, the Pinto model was not tested for a strike from behind.
Company research revealed that, had the company installed a special shield between bumper and fuel
tank (worth between $6.65 and $11), the safety standard of the Pinto model would be comparable with
other cars of its class. However, between 1971 and 1978 the company did not upgrade the model, as
Ford’s cost- benefit analysis revealed that it was 3 times cheaper to settle cases in courts than to upgrade
the model. In addition, the company did not inform its customers that this model was less safe than other
similar models. The period of 1976-1977 saw 13 explosions as a result of a strike from behind, which
exceeds accident rate for other similar cars by a point of two. However, eventually, settlements of claims
raised against Ford reached $20,9 million, which was much more than expenses for upgrading the model.
In addition to court penalties, Ford was forced to recall 1.5 million cars built between 1970-76, not to
mention the impact of declining sales. Former administrator and designer Harley Kopp publicly criticized
the model from the very beginning. He quit the company and went public, which saved many human
lives. Can he be qualified as whistleblower?
from a special ethics service to a hotline. Regardless of how a corporate ethics structure is organized, the
following principles are strongly recommended to be observed:
employees that disclosure of their identity would certainly facilitate consideration of an application. In
addition, guarantees of confidentiality of information shall be provided.
diligence. In any case, an applicant should be informed of the course and results of the subsequent
Employees, filing grievances and complaints, shall be guaranteed that they are safe from possible
other materials with names, addresses, and telephone and fax numbers, e-mail accounts of a corporate
ombudsman or ethics officer and make these materials available to personnel. Employees have to be
confident that every whistleblower, who has applied to a relevant department to file a grievance or signal
evidence of fraud, corruption, abuse of finances, sexual harassment, persecution of subordinates and other
violations, will be safe from reprisal by the accused.
It goes without saying that a complaint should not be based on idle rumors. When filing a complaint, an
employee should provide exhaustive answers to a set of following questions: who, how, when and, if
possible, why, as cases based on rumors or not substantiated with facts can damage reputation of innocent
R. T. George, Business Ethics, vol.1, St-Petersburg, 2001, Progress Group Publishing House, pp. 405-407
An ombudsman is a human rights defender. In Azerbaijan, the Law on Ombudsman was adopted by the
Parliament in December 2001. Every employee of a company in need of help in regard to business ethics
problems may apply to a corporate ombudsman and receive consultation, with confidentiality of his or her
application guaranteed. If necessary, the ombudsman makes recommendations to company management
to take certain measures. For example, at United Technologies, the ombudsman informs relevant parties
of emerging problems and monitors the process of application review. Employees normally maintain
telephone contact with the ombudsman. However, other types of communication (post, fax, e-mail) are
also available. As a rule, the ombudsman is an outside consultant.
On the other hand, an ethics officer could be employed by a company and have a special ethics
ethics officer is directly involved in the investigation. Some companies might have both structures in
place. Small firms normally delegate ethics officer’s functions to human resources managers and
ombudsman’s services are provided by an outside consultant.
The World Bank has designed a Conflict Resolution System (CRS), a special program to settle ethical
Moreover, the management of the Bank, being interested in swift and efficient settlement of any conflicts,
We believe that Azerbaijani companies should design and adapt their own codes of conduct. Global
experience shows that the very existence of such a document, combined with demonstrated management
commitment to principles of business ethics, can prevent many ethical violations.
The questions below are designed to assess your understanding of the material.
companies or shall each company set its own ethics standards?
What shall be done to ensure their safety?
What is the difference between a corporate ombudsman and an ethics officer?
THE WORLD BANK GROUP, Living Our Values, World Bank Publication