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To date, opinion remains sharply divided on whether whistle-blowers should be rewarded. The Dodd-Frank Act 2010 is the gold standard in support of rewarding whistle-blowers. The Act mandates the United States (US) Securities and Exchange Commission (SEC) to reward whistle-blowers for providing original information that leads to sanctions or recoveries of an amount above one million US dollars. The reward is determined as a percentage ranging between 10% and 30% of the sanctions or recoveries amount which determination is at the US SEC discretion. Legislation around the world, Kenya included, that provides for the reward of whistle-blowers borrows directly from the Dodd-Frank Act. Here in Kenya, for instance, The Whistleblower Protection Bill 2018 is the local adaptation of the Dodd-Frank Act. The Bill is yet to be enacted to law to make it operational.

Opponents of the practice of rewarding whistle-blowers argue that the act of blowing the whistle is principally a moral obligation of the part of the whistle-blower. Davis (2012) in his publication titled “Rewarding Whistleblowers: A Conceptual Problem?” argues that there are three ways to understand the reward. The first is Reward-as-compensation which seeks to undo—in advance as well as afterward—the worst effects of the unjust conduct whistle-blowers often face. Case studies abound to demonstrate that policies and laws that prohibit and condemn retaliation against whistle-blowers, are more theoretical than they are practical. Whistle-blowing still remains a risky affair for those who choose to do so. Studies show how whistle-blowers lose their jobs and even damage their career reputation and as a consequence lose their livelihoods and live on miserably. Against this experience, a compensation offer for whistle-blowers would be deemed acceptable as it primarily preserves the definition of whistle blowing inherent in which is the moral obligation to speak out. The second is Reward-as-deterrent and which is closely related to reward-as-compensation. In this sense, the objective of the reward is to deter executors of unethical activities since they know that potential whistle-blowers will not hesitate to blow the lid or buying them out may not be reasonable from a cost-benefit analysis. Again, the compensation safety net afforded to the whistle-blower does not violate the intrinsic definition of whistle-blowing. The last way of understanding reward is the basis for opposing the current provisions of legislation such as in the Dodd-Frank Act. This is Reward-as-inducement meaning that the reward is a positive incentive to blow the whistle, much like a bonus promised for increased productivity. It is recorded that the highest whistle blower reward the US SEC has made to date out of a single investigation is fifty million US dollars. Davis (2012) argues that this is counter-intuitive. This is because it will discredit the moral duty of whistle-blowing and convert it into bounty hunting where so-called whistle-blowers make spurious allegations in an attempt to bag the bounty. The argument goes on to relate the emergence of corporate mega scandals with the promise of massive bonuses for corporate executives. In summary, the promise of colossal rewards will attract the wrong behavior and whistle-blowing is no exception. The motive for blowing the whistle is the most important consideration in building a sustainable culture of speaking out. Organizations are best served when they understand and promote personal justification for whistle blowing {the defense that the whistle-blower should be able to give information even if no one else asks for it (indeed, should not ask for it)} over public justification for whistle blowing (the defense that should satisfy others).

So far, the discussion on rewarding whistle blowers has solely depended on the reward being entirely administered by a public sector commission in both the Dodd-Frank Act 2010 and The Whistleblower Protection Bill 2018 to protect public interest. But can private entities in their own capacities seek to encourage and sustain an ethical culture by committing to reward whistle-blowers? I certainly doubt it, at least not to the extent the public commissions are able to. In conclusion, I opine that a financially-induced whistle blowing mechanism risks betraying the original essence of whistle-blowing and may not be effective and sustainable in the long run, especially for private sector entities.

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