corporate governance / non-profit / whistleblowing

The Elf on the Shelf, Santa’s Whistleblowers

The Elf on the Shelf is a modern and increasingly popular Christmas tradition which began with a children’s book in the United States followed by a successful animated programme, features on NBC, the Tonight Show and even a float in Macy’s parade (Pinto & Nemorin 2015).  According to the tradition, elves are assigned to homes with the explicit charge of observing children’s actions all day on behalf of Santa Claus (CCA & B LLC 2013).    These elves perched high on shelves are the monitors of Santa’s “naughty” and “nice” lists and, as the story goes, return to the North Pole each night to report their observations to Santa Claus (CCA & B LLC 2013).   So does this make the elves whistleblowers?

Although there are many definitions for whistleblowing the widely used and most cited definition is “the disclosure by organisation members (former or current) of illegal, immoral or illegitimate practices under the control of their employers, to persons or organisations that may be able to effect action” (Near & Miceli 1985).  The first element to consider is the nature of the elves and their relationship to Santa Claus.  The tradition references Santa Claus as “the boss”, and at the end of Christmas the elves return to the North Pole to join Santa Claus (CCA & B LLC 2013).    Although we may not be sure of the legal or organisational structure of Santa Claus’ operations, the elves appear to be members of some form of the organisation, and thus are “organisation members”.

The elves report on “naughty” behaviours, but the tradition has not operationalised this concept.  It is also unclear if a universal code of conduct explaining “naughty” and “nice” behaviours has been clearly communicated to the children. Children are treated differently in most jurisdictions to adults, for example, 12 is the age of criminal responsibility in Ireland (Criminal Justice Act 2006, S129), and parents or guardians can be held liable for tortious actions of children. However, criminal or tortious actions of children can still be reported to the relevant authorities and action taken, and thus the elves could report on such illegal activities.  It is further unlikely that engagement in immoral or illegitimate practices would not be included by Santa in the concept of “naughty” behaviours, even if these are not clearly defined.

A whistleblower discloses to someone who “may be able to effect action”, for example, a supervisor, board of directors, police or regulators (Near & Miceli 1985).  A requirement to first report to supervisors is a common requirement in organisations (Calderón-Cuadrado et al. 2009).  In the case of the elves, they also have an obligation to report to their supervisor, “the boss”, Santa (CCA & B LLC 2013).   And Santa is in a position to effect action, even if that action is limited to punishment or reward, with penalties imposed without apparently any form of due process, or appeal.   The inability of the accused individual to cross-examine their accuser is a major criticism of anonymous and confidential whistleblowing hotlines (Dowling 2008).  In addition, in most, but not all, jurisdictions children, will not face personal consequences for breaches of the criminal or civil law.  However, Santa does have the power to impose a penalty, although it appears to be a binary process, that is, receiving or not receiving presents, which lacks proportionality, a key feature of social justice.  And there is a lack of empirical research on the prevalence of the delivery of coal to “naughty” children.

The reason for the development of anonymous and confidential whistleblowing hotlines is to encourage reporting by providing protection, through anonymity, for the whistleblower. Retaliation against whistleblowers is recognised and well-researched (Near & Miceli 1986; Rehg et al. 2008; Mesmer-Magnus & Viswesvaran 2005). The elves are also protected from retaliation, as the child is not allowed to touch the elf, “Christmas magic is very fragile and if an elf is touched it may lose that magic and be unable to fly back to the North Pole” (CCA & B LLC 2013), with the implication that touching the elf is “naughty” behaviour placing the child on the “naughty” list automatically.

Thus it does appear the elves operate as potential whistleblowers. However, whistleblowing is not always effective, for example, whistleblowers did not play a major role in uncovering the financial crisis that led to the Great Recession (Moberly 2012), and thus Santa could introduce improvements to the system. First, clearly outline and communicate the nature of “naughty” and “nice” behaviours to create certainly for children and eliminate subjective interpretations by different elves. Second, introduce fair procedures, such as including an investigation, opportunities to present the case for the child, and data protection procedures.  Finally, introduce a range of penalties for different levels of “naughty” behaviour ensuring penalties are proportionate.

However, Santa may not be interested in these measures, as it is possible that Santa is just complying with legal requirements.  The US Sarbanes Oxley Act 2002 required all US companies and their subsidiaries to establish anonymous and confidential whistleblowing hotlines. Although the location of Santa’s workshop is the North Pole, with the global population growth it is likely that Santa has had to expand his operations over recent decades. It is possible that it could include the United States, for example, Alaska would be a convenient extra-territorial expansion.  Thus Santa may have found himself under US jurisdiction and subject to Sarbanes Oxley Act 2002.  Perhaps it is not a coincidence that the elves only began to appear in 2004!

Happy Christmas!

References

Calderón-Cuadrado, R. et al., 2009. Ethics Hotlines” in Transnational Companies: A Comparative Study. Journal of Business Ethics, 88, pp.199–210.

CCL & B LLC. (2013). The Elf on the Shelf® website. Retrieved from: http://www. elfontheshelf.com/.

Dowling, D.C.J., 2008. Sarbanes-Oxley Whistleblower Hotlines Across Europe: Directions Through the Maze. The International Lawyer, 42, pp.1–57.

Mesmer-Magnus, J. & Viswesvaran, C., 2005. Whistleblowing in Organizations : An Examination of Correlates of Whistleblowing Intentions , Actions , and Retaliation. Journal of Business Ethics, 62(3), pp.277–297.

Moberly, R., 2012. Sarbanes-Oxley’s Whistleblower Provisions: Ten Years Later. South Carolina Law Review, 64. Available at:

Near, J.P. & Miceli, M.P., 1985. Organizational dissidence: The case of whistle-blowing. Journal of Business Ethics, 4(1), pp.1–16.

Near, J.P. & Miceli, M.P., 1986. Retaliation against whistle blowers: Predictors and effects. Journal of Applied Psychology, 71(1), pp.137–145.

Pinto, L.E. & Nemorin, S., 2015. Normalizing Panoptic Surveillance Among Children: “The Elf on the Shelf .” Our Schools/Our Selves, 24(No.2).

Rehg, M. et al., 2008. Antecedents and outcomes of retaliation against whistleblowers: Gender differences and power relationships. Organization Science.

 

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