Question 1 Cynthia Wong worked as the Head of Credit Processing (Loans Department) of a major commercial bank in Kuala Lumpur, Malaysia. In that capacity, she has occasionally rejected some loan applications which clearly contravened Bank Negara Malaysia (BNM) Responsible Lending guidelines that commercial banks are subject to. One day, she discovered that a number of loan applications that she has rejected had been approved by her direct manager, the Managing Director (MD) who is also the 2nd highest ranking executive in this organisation. Frustrated, she immediately brought these contraventions to the attention of the Chief Compliance & Risk Officer (CCRO) of the bank. The CCRO promised to look into the matter. A few weeks later, she inquired from the CCRO what his investigation had revealed. He confirmed that these loans were approved because of relationship and political purposes and were indeed in breach of BNMs guidelines, but asked Cynthia to simply accept these transactions as part of the way in which the bank did business. Cynthia also learned that the Chief Executive Officer (CEO) of the bank also approved these transactions jointly with the MD. Cynthia took matters further by contacting other senior managers in the bank. Their reactions were all similar. Do not rock the boat. Simply accept the culture of this bank. This is the way the CEO and MD does business. In the end, our bank must meet our profit targets so that we can keep our jobs. Following the lack of success, Cynthia decided to lodge a report with BNM and the Malaysian Anti-Corruption Commission (MACC). The Chief Financial Officer (CFO) was very angry when he learned about Cynthias actions to report the incidents to BNM and MACC. He viewed Cynthia as a rat who betrayed the trust of her superiors and her actions were a breach of confidentiality that she had signed in her employment contract with the bank. Immediately, Cynthia was transferred to another department in Kota Kinabalu, Sabah reporting to a 25 year old junior executive. This was clearly a demotion from her previous role of head of department overseeing 100 headcounts in the Kuala Lumpur office. Over the next 3 months, Cynthias work was openly criticised and she was isolated from the Banks social and employee development training programmes. Suffering from the effects of stress, Cynthia decided to leave the bank. She had to sign a secrecy undertaking and received a letter from the bank stating that she had voluntarily resigned. Source: Adapted from Rossouw D & Van Vuuren L 2011 Business ethics, Oxford Fajar Sdn Bhd. Required: (a) Briefly explain what is whistle-blowing with appropriate examples from the case. (10 marks)

(b) Identify the whistle-blower in this case and explain TWO (2) risks that a whistle-blower may face. Give relevant examples from the case to support your answer. (15 marks)

(c) In this case, do you believe that the act of whistle-blowing was justified? Explain TWO (2) reasons why or why not. Give relevant examples from the case. (15 marks)

(d) Discuss TWO (2) ethics related initiatives that the bank can take to prevent whistle-blowing with appropriate examples. (20 marks)