Diversity and Whistle Blowing

Discuss about the Diversity and Whistle Blowing.

For this assignment, company Woolworths has been selected (listed in ASX 200). It is an Australian retail company that has business in Australia, India and New Zealand. The company was founded in the year of 1924 (Woolworths 2016). It has headquarters in Bella Vista, New South Wales Australia. It has been found that there is more than 202,000 employees work in the organization. It is the second largest organization in Australia in terms of revenue (A$ 59 billion). It has been found that the company manages some of the Australia’s most recognized and trusted brands. The manager of the organization mentioned, “We endeavor to create a world class experience for consumers at all levels of our business.”

It had been found that Brand Banducci is the CEO and Gordon Cairns is the Chairman of Woolworths (Woolworths 2016).  The Board of Directors acts on behalf of shareholders to supervise the company. They also try to maintain good corporate governance. It is the role of the Board of Directors to serve and represent the interest of the shareholders for the organization by overseeing and apprising the company policies and performance (Woolworths 2016). It has been found that the management board of the organization is responsible for all management decisions and operations across the company’s brands.

AICD Target for Female Board Members by 2018

According to the Australian Institute of Company Directors (AICD) all organizations have the leadership role to play so that diversity in the board can be improved can be improved both at home and internationally. AICD has provided all ASX 200 companies to ensure that 30% of the of the members in board of directors has to be 30% (Aicd 2016). They have to meet the target by 2018. The managing director of AICD mentioned that the new objective is a significant part of AICD’s diversity initiatives (Aicd 2016). Mr. Brogden mentioned “There is an undeniable case for gender diversity on boards. It is not only the right thing to do but the smart thing to do, because it means better business performance.”   

Diversity

In order to describe diversity, Richard et al. (2013) mentioned, “The concept of diversity encompasses acceptance and respect. It means understanding that each individual is unique, 
and recognizing our individual differences”.  Diversity can appear along various dimensions such as ethnicity, race, sexual orientation, political beliefs, religious beliefs, age or any other ideology. Metcalfe and Woodhams (2012) added by saying “Diversity is the exploration of these differences in a safe, positive, and nurturing environment. It is about understanding each other and moving beyond simple tolerance to embracing and celebrating the rich dimensions of diversity contained within each individual.”

There are various types of diversity can be found in sociology, politics and law. They are such as cultural diversity, functional diversity, multiculturalism, political diversity, Neurodiversity, jurisdiction diversity.  Multiculturalism can be recognized as the “promotion of multiple ethnic cultures” (Boulouta 2013). On the other hand functional diversity is a term used for disability, special needs, handicap and impairments. Political diversity means development of social and political policy to encourage tolerance for people of different background. Gender diversity can be defined as “the equal treatment of and acceptance of both males and females in an organization. Diversity adds value to a company’s bottom line due to the different viewpoints and backgrounds of diverse individuals”. Gender diversity is the main issue discussed in this part of this assignment.

Good Corporate Governance Practices

As Grunig et al. (2013) mentioned, “In good corporate governance practice good company takes action rather than just saying.” It has been found that the company Woolworths is committed to develop and promote diversity with the help of a range of initiatives. It includes focusing on disability employment, providing equal opportunity to all employees and employing women in management. The CEO of the company mentioned “We value, respect and leverage the unique contributions of people with diverse backgrounds, experiences and perspectives to provide exceptional customer service to an equally diverse community.”  The Board of Directors has developed a “diversity related” measurable objectives for the organization. The assessments of the objectives are carried out on annual basis by the “People Policy Committee.” They report to the board of directors in order to make appropriate recommendation.

According to the Broad directors the objectives for the company are “1. Continue to recognize and celebrate our multicultural diversity and grow our workforce to reflect the diversity of the Australian population 2. Continue to incrementally grow the number of women performing senior roles 3. Continue to create programs that prepare women to take on senior roles within the business both in operational and specialist support areas 4. As part of Woolworths’ ongoing commitment to the reconciliation process, continue to assist indigenous Australians to access employment opportunities through our business 5. provide people with a disability employment opportunities and career advancement” (Muzio and Tomlinson 2012). The management of the organization is committed to reach the target of 30% female members in the board of directors within 2018. The company provides equal opportunity to all employees so that they can reach their full potential irrespective of their gender and cultural differences.

Assessing the Qualification of Females who are Appointed on the Board

The company has committed to meet the target given by AICD and ensure that 30% of the boards of directors are female.  The CEO and Director of HR monitor the qualification of the female who are appointed on the board.  They report about their progress to the “People Policy Committee.” This committee develops polices to measure the qualification and effectiveness of females who are appointed on the board.

Good and Bad Examples of Having Female Members on Board

Eli Lilly is a good example of having female members on board. The company began to hire and promote women in key roles long before the practice became common. In the year of 1876, the organization hired its first female employee and in 2012, 36% of the board of directors for the company is female (Saleebey 2012).  In order to discuss the positive aspect of having so many female members in the Board of Directors, the CEO of the company mentioned “Because Lilly serves so many different cultures and needs, its diversity efforts span the globe. In 2004, Lilly introduced a program to develop female leaders in Japan and has since rolled out work–life balance programs there”.

It has been found that there are approximately 12 companies that have male dominated board of members. It has been found that energy, technology and automotive industries are dominated by male board of directors. Delphi automotive is one of the major companies that do not have female board member. It has been found that these lag behind equity by 53% to those who have women board members. They also have 42% less return on equity than those companies. 

Recommendations

There are some recommendations have been provided for the company Woolworths so that they can increase the number of female members in the board of directors. They are mentioned below:

  1. The company needs to develop a written policy to describe how the organization is going to represent women in the board.
  2. They need to develop appropriate board recruitment policy. A committee has to be developed to analyze the qualification of the female candidates.
  3. The management has to implement in all sectors such as selection, recruitment, talent development and promotion.

Reason for Developing this Report

This section of the report has been developed for Australian shareholder association. The main reason behind developing this report is to analyze the harm and benefits of whistle blowing. The appropriate communication process in which whistle blowing should be done has also been mentioned in this report. Some examples of whistle blowing have been provided in this report.

Whistle Blower

According to Caillier (2015), Whistleblower is an individual “who exposes any kind of information or activity that is deemed illegal, unethical, or not correct within an organization that is either private or public. The information of alleged wrongdoing can be classified in many ways: violation of company policy/rules, law, regulation, or threat to public interest/national security, as well as fraud, and corruption. ” Lavena (2016) stated that whistle blowers can bring allegations and information to surface either externally or internally. In case of external whistle blowing a person can shed light on a scam by taking help from a third party and accuse a company. On the contrary, In case of internal whistle blowing, an individual can bring attention of people to a scam within the accused organization. Weiskopf, and Tobias-Miersch (2016)  mentioned “whistleblower can bring allegations to light by contacting a third party outside of an accused organization. Whistleblowers can reach out to the media, government, law enforcement, or those who are concerned but also face stiff reprisal and retaliation from those who are accused or alleged of wrongdoing.”

It has been found that whistle blowing in the public domain has been increased in the last 50 years (Caillier 2015). There are various laws have been developed in number of states in Australia.   According to the former NSW Police Commissioner Tony Lauer “Nobody in Australia much likes whistleblowers, particularly in an organization like the police or the government.” However, there is an association in Australia named as Whistleblower Australia that exposes any malpractice within various organizations. Dalton and Radtke (2013) argued that inexperienced whistle blowing can cause predominant and prolonged assault on the well being of the whistleblower.   It can cause drug and alcohol problems, distress, flashbacks, paranoid of behavior, nightmares and anxiety.  All those factors increase suicidal tendency by 10% (Lavena 2016).

Good Outcome of Whistle Blowing

The major benefits of whistle blowing are such as risk management, fraud protection, good corporate governance, increase workplace safety and reduce workplace bullying. As Near and Miceli (2013) stated, “whistle blowing can control and eliminate reputational and financial risk through the early reporting of inappropriate conduct including bullying in the workplace, fraud, corruption, bribery, work health and safety and sexual harassment.”   It also helps to develop appropriate corporate governance system supported by procedures and policies to comply with the standards. In addition, whistle blowing improve occupational health and safety management procedure for customers, employees and visitors. In order to decrease whistle blowing, they need to implement occupational health and safety framework. Weiskopf, and Tobias-Miersch (2016) explained “The development and implementation of an appropriate occupational health and safety management framework includes effective reporting of concerns to the management along with an external facility to report concerns anonymously.”  

Caillier (2015) stated that employees are the greatest asset of an organization. However, misbehavior and misconduct of employees can become a liability of an organization. It has been found that workplace bullying has become one of the major concerns for most of the organizations.  The problem is so severe that Australian government has developed a uniform code for the whole country named “Code of Practice: Preventing and responding to workplace bullying.”

Bad Outcome of Whistle Blowing

In order  explain the consequence Barry Adams mentioned “The list of negative consequences to whistle blowing seems endless: broken promises to fix the problem, disillusionment, isolation, humiliation, loss of job, questioning of the whistleblower’s mental health, vindictive tactics to make the individual’s work more difficult and/or insignificant, assassination of character, formal reprimand, and difficult court proceedings. ” It has been found that the negative impact of whistle blowing depends upon the importance of the information that is revealed and the person to whom the information is revealed (Caillier 2015). In Australia, it has been found that nobody in Australia likes Whistle blowing, especially in government organizations.

Weiskopf and Willmott (2013) stated that, there are mainly three kids of harm or threat can occur to the whistleblowers. They are like damage of public trust, individual harm and threat to national security (Dalton and Radtke 2013). It has been found that revealing the identity of whistleblowers automatically puts their life in risk. In many countries death penalty is given for treason.  In US law, it has been mentioned “whoever knowingly and willfully communicates, furnishes, transmits, or otherwise makes available to an unauthorized person, or publishes, or uses in any manner prejudicial to the safety or interest of the United States or for the benefit of any foreign government to the detriment of the United States any classified information.”

Communication of Whistle Blower

Whistle blower should communicate someone internally first. If there is no response then they should communicate outsider. Whistle blower should communicate to senior management like Company secretary or director or internal audit division but he or she should be having independent relationship with company. Like if there is director then he or she should be non-executive director.

Example of Whistle Blowing

One good example of whistle blowing is Commonwealth bank insurance department in which one doctor did whistle blower. He tried to communicate internally but because of no response, he published in media. The bad outcome came from this was the Bank sued on doctor that he has stolen our confidential documents.

Recommendations

  1. Whistle-blowers must concentrate on their communication policy. They should communicate someone internally first. If there is no response then they should communicate outsider.
  2. There are various regulations that can help to protect whistle-blowers. Caillier (2015) stated, “If you find that you have been treated badly because you blow the whistle, there is a law which offers protection in certain cases. The Public Interest Disclosure Act 1998 (PIDA) is known in the UK as the whistle blowing law”. Weiskopf and Willmott (2013) stated, “This Act provides that someone who blows whistle must not suffer any detrimental treatment as a result of raising a concern. Detrimental treatment includes disciplinary action, threats, being isolated or other unfavourable treatment connected with raising a concern. In addition the law provides protection for those that have been dismissed because they have made a whistle blowing disclosure.”
  3. At first, the management needs to find out the problems the whistle-blowers have to face. Then appropriate corporate governance strategy needs to be developed in organizations to reduce whistle blowing. They need to clarify the role of board managers.  In addition appropriate monitoring of organizational performance is required. They have to prohibit any kind of unethical behaviour in the organization. The management has to ensure that the directors have all the necessary information about their organization.

Reference List

Aicd, 2016. Australian Institute of Company Directors. [online] Aicd.companydirectors.com.au. Available at: http://aicd.companydirectors.com.au/ [Accessed 7 Sep. 2016].

Boulouta, I., 2013. Hidden connections: The link between board gender diversity and corporate social performance. Journal of Business Ethics,113(2), pp.185-197.

Caillier, J.G., 2015. Transformational Leadership and Whistle-Blowing Attitudes Is This Relationship Mediated by Organizational Commitment and Public Service Motivation?. The American Review of Public Administration,45(4), pp.458-475.

Dalton, D. and Radtke, R.R., 2013. The joint effects of machiavellianism and ethical environment on whistle-blowing. Journal of business ethics, 117(1), pp.153-172.

Grunig, L.A., Hon, L.C. and Toth, E.L., 2013. Women in public relations: How gender influences practice. Routledge.

Lavena, C.F., 2016. Whistle-blowing individual and organizational determinants of the decision to report wrongdoing in the federal government.The American Review of Public Administration, 46(1), pp.113-136.

Metcalfe, B.D. and Woodhams, C., 2012. Introduction: New Directions in Gender, Diversity and Organization Theorizing–Re‐imagining Feminist Post‐colonialism, Transnationalism and Geographies of Power. International Journal of Management Reviews, 14(2), pp.123-140.

Miceli, M.P., Near, J.P. and Dworkin, T.M., 2013. Whistle-blowing in organizations. Psychology Press.

Muzio, D. and Tomlinson, J., 2012. Editorial: researching gender, inclusion and diversity in contemporary professions and professional organizations.Gender, Work & Organization, 19(5), pp.455-466.

Near, J.P. and Miceli, M.P., 2013. Organizational dissidence: The case of whistle-blowing. In Citation classics from the Journal of Business Ethics (pp. 153-172). Springer Netherlands.

Richard, O.C., Kirby, S.L. and Chadwick, K., 2013. The impact of racial and gender diversity in management on financial performance: How participative strategy making features can unleash a diversity advantage. The International Journal of Human Resource Management, 24(13), pp.2571-2582.

Saleebey, D., 2012. The strengths perspective in social work practice. Pearson Higher Ed.

Weiskopf, R. and Tobias-Miersch, Y., 2016. Whistleblowing, Parrhesia and the Contestation of Truth in the Workplace. Organization Studies, p.0170840616655497.

Weiskopf, R. and Willmott, H., 2013. Ethics as critical practice: The “Pentagon Papers”, deciding responsibly, truth-telling, and the unsettling of organizational morality. Organization Studies, 34(4), pp.469-493.

Woolworths., 2016. Woolworths. [online] Available at: https://www.woolworths.com.au [Accessed 7 Sep. 2016].

 

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