Governance under pressure: Boards, whistleblowers and the cost of courage

IN CORPORATE governance theory, whistleblowing is presented as a noble act.

- NQOBANI MZIZI

It is the final alarm bell when internal controls, risk systems and ethics programmes fail to deter wrongdoing. But in practice, whistleblowers often pay the price for their courage.

They are labelled disloyal, isolated, retaliated against, quietly restructured out, or, in the worst case, wiped out. The real shame is that this frequently happens under the watch of boards of directors that claim to uphold integrity and accountability.

Boards often approve whistleblowing policies and list them in their governance reports. Hotlines are set up, ethics posters are displayed, and employees are encouraged to “see something, say something.”

But what happens after that initial call is made? Who follows up or protects the whistleblower? More often than not, boards delegate these responsibilities to management, assuming that the existence of a policy equals its effective application.

The collapse of Steinhoff still looms large in South Africa's corporate memory. In hindsight, the signals were there. The whistleblowers were present. But the oversight mechanisms weren't responsive, and the board didn't appear to act with the urgency required. Whether due to denial, delay or deference to management, the board failed to heed the warnings early enough to prevent disaster. The cost was not just reputational as it ran into billions of rand, with long-term implications for employees, pensioners and shareholders.

In some public institutions, whistleblowers have been vilified not because they were wrong, but because they were inconvenient. The tragic murder of Babita Deokaran after flagging suspicious payments at a Gauteng health department is a chilling reminder of the extreme risks whistleblowers can face when protection fails. Cynthia Stimpel, who raised the alarm about procurement at South African Airways, was sidelined and forced out despite acting in the public interest.