Whistle blowing is:
Reporting unethical practices by their employer to outsiders
Reporting unethical practices by their employer to outsiders — option 3.
What whistle blowing is. An employee or insider discloses illegal, immoral or illegitimate practices under the control of his employer to persons or bodies able to act on the information. The defining features are that the discloser is an insider, the conduct is genuinely wrongful, and the disclosure is made outside the ordinary chain of command.
| Type | Disclosed to |
|---|---|
| Internal | A higher authority inside the organisation — audit committee, ethics officer, board |
| External | Outsiders — a regulator, the police, the press or the public; this is what the question describes |
The dilemma it creates. Whistle blowing sets two genuine duties against each other: loyalty and confidentiality owed to the employer, and the duty to prevent harm to third parties or the public. Business ethics generally holds external disclosure justified when the wrong is serious, the evidence is sound, internal channels have been tried and have failed, and disclosure is likely to prevent the harm.
The cost to the whistle blower is the reason legal protection exists: retaliation, dismissal, transfer, ostracism and blacklisting are common, which is why so much wrongdoing goes unreported.
| Protection | Content |
|---|---|
| Whistle Blowers Protection Act, 2014 (India) | Machinery to receive complaints of corruption or abuse of power against public servants and to protect the complainant |
| SEBI LODR — vigil mechanism | Listed companies must have a whistle-blower policy with direct access to the audit committee chairman |
| Companies Act, 2013, s.177(9) | Vigil mechanism mandatory for prescribed classes of companies |
| Sarbanes-Oxley Act, 2002 (US) | Enacted after Enron and WorldCom; protects employees of listed companies who report fraud |
Why the other options fail. They are definitions lifted from the decision-making chapter that sits alongside ethics in this syllabus: option 1 defines decision making, option 2 defines a problem, and option 4 describes rational decision making. Recognising that all three belong to a different topic settles the question immediately.
Hence, the answer is reporting unethical practices by their employer to outsiders.
Similar Questions
Assertion (A) : Bad corporate governance can cast doubt on a company's reliability.
Reasoning (R) : Companies that do not cooperate sufficiently with auditors can publish non-compliant financial results.
Code :
Which among the following are also called Corporate Social Responsibility ?
(a) Corporate Conscience
(b) Corporate Citizenship
(c) Responsible Business
Code :
Which one among the following is not a part of Corporate Social Initiatives ?
Which of the following is/are the component(s) of Ethics by field of interest ?
What is the right sequence of four psychological sub-processes in ethical action given by James Rest ?
CSR is important because :
Assertion (A) : Corporate behaviour towards stakeholders is an important concept in practice and a central part of corporate Governance.
Reason (R) : It has to be ethical, legal and responsible behaviour for organisation, stakeholders and society.
Code :
Which one of the following is not a principle of corporate Governance ?
Match the items given in the List - I and List - II and suggest the correct code :
List - I List - II (a) Ethics (i) Right code of behaviour for a group or profession (b) Morality (ii) Prescribes right conduct for everyone (c) Moral standard (iii) Needs some inclination to follow morality (d) Meta Moral Standard (iv) Practical and pragmatic Code :
Assertion (A) : When a corporation acts ethically and socially responsible in its business decisions and strategic planning, then the corporation will be more sustainable.
Reason (R) : Socially responsible corporate behaviour is increasingly seen as essential to long-term survival of companies.
Important Questions from Corporate governance and business ethics
Corporations are controlled and directed by which one of the following?
Which among the following is not a correct statement with regard to Corporate Governance in India ?
As per the Anglo-Saxon Model of Corporate Governance, the authority lies with the following. Arrange these in decreasing order of authority.
A. Board of Directors
B. Managers
C. Shareholders
D. Employees (Company)
E. Trade unions
Choose the correct sequence from the options given below
Assertion (A) : Corporate governance is an important instrument of investor protection.
Reason (R) : Strong corporate governance is indispensable to resilient and vibrant capital markets.
Which one of the following options is correct?
Which one of the following is not a norm of corporate governance ?
