An edited version of this article first appeared in the legal affairs section of The Australian on the 24th February 2017. Click here to view that version.

Recent incidents have only served to reinforce the far from ideal stereotype that surrounds whistleblowers – the brave (perhaps foolish) individual who, under extraordinarily difficult circumstances, lifts the lid on scandalous conduct and pays dearly for their selflessness. Fortunately these outcomes, although inexcusable, are acting as a catalyst for change.

In November last year, a parliamentary inquiry into whistleblower protection was launched. The findings will inform changes to existing whistleblower legislation in Australia which, to say the least, is deficient.

This being said, we must also accept that there is no such thing as a foolproof legislative framework. Whistleblower protection is a complex topic. Every situation and every whistleblower are unique and no legislation, no matter how well crafted, can be expected to be universally effective.

However, to increase the likelihood of being effective, legislation must begin by addressing the root causes of inferior whistleblowing outcomes. Although gaps in our knowledge still exist, the large body of research into whistleblowing provides some clues into how this can be achieved. A prominent theme in the research is that positive whistleblowing outcomes are far more likely to occur in organisations that promote, embrace and support those who speak up.

Therefore legislation must, first and foremost, place the onus on organisations to create environments that are supportive of whistleblowing. And this requires far more than a formal whistleblowing program. Organisations must have mechanisms in place that monitor their employees’ attitudes towards whistleblowing. When these mechanisms identify that there is an aversion to speaking up, they must demonstrate that they are responding appropriately.

No doubt financial rewards for whistleblowers will be a topic that features prominently in the submissions to the inquiry. The recently introduced “bounty” system in the U.S. that provides the Securities and Exchange Commission (S.E.C.) with the ability to issue rewards to whistleblowers is often cited to provide evidence for the efficacy of financial rewards. Personally, I remain circumspect.

The primary purpose of the U.S. “bounty” system is not to provide whistleblowers with protection per se. Rather, it aims to encourage people with information to come forward, thus increasing the quality of the information obtained. Based on this measure alone, an argument could be made that the bounty system has been a success. The number of disclosures made to the S.E.C. since the program’s inception has grown significantly.

However, if one looks beneath these headline numbers, a murkier picture emerges. Although the S.E.C. doesn’t publish the proportion of disclosures that progress to investigations, there is evidence suggesting that many meritless claims are being made. As many of the scandals that whistleblowers have exposed demonstrate, the use of lucrative economic incentives can drive adverse outcomes. Whistleblower hotlines are not immune to this.

If our primary goal is whistleblower protection, then a more effective approach would be to provide whistleblowers with some type of financial “safety net”. As we know, in the worst case scenarios, the costs of whistleblowing, both emotional and financial, are enormous. Loss of employment, impaired career prospects, legal fees, repercussions for mental and physical health, and, at the extreme, family breakdowns, are all issues that whistleblowers have had to contend with.

In scenarios where organisations have failed a whistleblower, then it is only proper that they should appropriately compensate them. The compensation should cover all costs incurred by the whistleblower be they direct, indirect, in the present or future. Amongst other things this could incorporate loss of income, medical fees, legal fees and any costs associated with forced relocation (be it due to threats to personal safety or seeking to improve employment prospects).

As mentioned, the overarching objective of this type of legislative approach must be to encourage organisations to create the conditions that value and support whistleblowing. This is how we can best address the root causes of inferior whistleblowing outcomes. Organisations that ostracise, shun and chastise those who speak up not only make life difficult for whistleblowers, but are far more likely to venture down the slippery slope of ethical failure.

Dennis Gentilin is the author of The Origins of Ethical Failures. In 2004, he was a whistleblower in the FX trading scandal that rocked the National Australia Bank (NAB). He left the NAB in 2016 and is now the founding director of Human Systems Advisory. He is an invited speaker at the National Integrity 2017 conference being held in Brisbane on the 16th March.