Whistle-blowing is surprisingly complex. It's basically about controlling the flow of information within and between individuals, organizations, and government. It's also about monitoring and enforcing laws and rules. The "ethics of whistle-blowing," therefore involves the values that underlie the act of whistle-blowing and how it affects the various stakeholders. Thus, a would-be whistle-blower must make a moral decision as to whether to blow that whistle, who to blow the whistle on, and who to blow the whistle to. Some whistle-blowers are motivated by moral concerns, others by other less altruistic motives such as retribution. Some allegations are true while others are false. Hence, some acts of whistle-blowing are "justified" others are not. Conversely, an organization must decide how to treat the whistle-blower, whether to act upon the information provided by whistle-blowers, and how much time, effort, and resources it is willing to expend encouraging or discouraging this form of internal surveillance. Finally, the government has erected a legal regulatory regime that affects the entire process.
By definition, whistle-blowing targets harm, and therefore, it involves normative judgements involving legality, morality, or both. Click here to see my discussion of harm. Thus one might "blow the whistle" on an individual, several individuals, or an entire organization (public or private) that violates laws (criminality) or violates moral rules (morality). In both cases there may be greater or lesser degrees of harm (the magnitude of the harm of "killing humans" is obviously greater than "jaywalking.") And of course, not all illegal acts are immoral acts and not all immoral acts are illegal acts. Violations of legality and/or morality imply the imposition of sanctions. We can argue over whether those sanctions ought to be imposed in order to enforce retributive justice or to deter future wrongdoing. Ilegality sometimes sanctions acts of "harmless immorality" such as the violation of "blue laws" that make it illegal to open stores on Sunday. Legal Philosophers call the legal (governmental) enforcement of harmless immorality "legal moralism."
Most illegality sanctions "harm to others," however some laws are "paternalistic" and therefore attempt to sanction "harm to self." Therefore, whistle-blowers can "blow the whistle" on greater and lesser degrees of harm that are subject to either legal and/or moral sanctions. If an act is illegal, then it is subject to legal sanctions such as fines, incarceration, death etc. If an act is merely immoral there would be only a moral sanction, which might involve being ostracised or being condemned to hell by religious authorities. Worldwide there are many religions that sanction different harmless immoralities such as: shaving beards, eating specific foods, wearing revealing clothing, dancing, using condoms, or buying liquor on Sunday. Some political regimes extensively enforce morality via legality (Saudi Arabia), therefore, moral violations become crimes sanctioned by the state. Now, let's get back to those basic moral questions.
What kinds of acts acts ought to be subject to whistle-blowing?
...Given that organizations must expend time, energy, and resources monitoring and enforcing whistle-blowing, it makes good economic sense to limit whistle-blowing to major harms, which are usually sanctioned by legality. For example, it probably isn't worth it for a Catholic organization to act on whistle-blowing for a member's use of condoms, getting a vasectomy, or missing mass on Sunday. The cost of investigating most harmless immoralities would exceed the benefits. Thus, most reasonable whisle-blowing policies focus on major legalities, or crimes.
...No organization wants to act on false claims, therefore, the credibility of the whistle-blower must be taken into account. Does the whistle-blower have access to the evidence presented? Is the whistle-blower merely disgruntled with the organization and seeking retribution? Does the whistle-blower have an "ax to grind?" Does the allegation make sense? Who is responsible for the alleged wrongdoing?
...If it seems unlikely that a crime has been committed, is it worth an organization's time, energy, and resources to investigate it?
Who should the whistle-blower blow the whistle on?
...Obviously, if possible whistle-blowers ought to blow the whistle ONLY on guilty parties not innocent parties. Some crimes involve one party, some are conspiracies that involve many cooperating parties.
...Sometimes conspiracies involve the top leaders of an organization, which makes internal investigation difficult.
Who should the whistle-blower blow the whistle to?
...If it seems likely that a major crime has been committed the whistle-blower can elect to "blow the whistle" either inside the organization or outside the organization. If inside, it must be blown within the proper organizational channels, usually by starting from the bottom and working your way up. If the whistle-blower chooses to blow the whistle outside the organization it's usually to the appropriate governmental agency or the media.
...Some crimes MUST (by legality) be reported to the government, and therefore, attempts to conceal criminal activity from the government are subject to legal sanctions.
To what degree ought an organization either encourage or discourage whistle-blowing?
...Organizations can provide either disincentives or incentives for whistle-blowing. Some organizations make it too easy to whistle-blow, others make it too difficult. Some organizations retaliate against whisle-blowers by imposing sanctions, which might include expulsion from the organization. Others offer financial incentives to encourage internal whistle-blowing (within the organization) in the form of financial rewards or guaranteeing anonymity for whistle-blowers. In recent years, the government has encouraged whistle-blowing by offering rewards for external whistle-blowing.
...There are unanticipated consequences associated with whistle-blowing. One of the least appreciated is the fact that when an organization encourages whistle-blowing, it eventually fosters a culture of distrust among its members. Therefore, members tend to be distrustful of other members and the organization as a whole and members become more secretive. Conversely, if an organization discourages whistle-blowing and relies more on trust, then a "culture of trust" is more likely to develop, but then the system tends to be more vulnerable to opportunism.
Here's my general take on whistle-blowing. The basic problem is the illusion (or "Fatal Conceit") that organizations can, in fact, control whistle-blowing. First of all, the government requires that most organizations (especially business organizations) have some kind of grievance process in place. If that process over-incentivizes whistle-blowing, then the organization will have to expend more time, energy, and resources investigating frivilous and false claims. If a whistle-blower is not satisfied with the internal organizational investigation, the whistle-blower can always choose to blow outside of the organization. If the process discourages internal whistle-blowing, then whistle blowers will simply go outside of the organization. Therefore, I would argue that any organization that believes that it can control whistle-blowing is delusional. The best policy, therefore, is to comply with legality...and no more.