A whistleblower is an employee who discloses organizational wrongdoing to parties who can take action. Whistleblowers often go directly to a federal government bureau to report what they consider to be fraud and poor ethics by their employer. Whistleblowers are often ostracized and humiliated by the companies they hope to improve.

The Sarbanes–Oxley Act includes some protection for whistleblowers. Employees who report fraud related to corporate accounting and auditing have a way of gaining reinstatement, as well as back pay and legal expenses. But, more than half of the pleas of whistleblowers are ignored. The leader needs to sort out the difference between a troublemaker and a true whistleblower.

Because the pleas of whistleblowers are often dismissed, it is important for leaders at all levels to create a comfortable climate for legitimate whistleblowing. Being a whistleblower requires a small act of leadership, in the sense of taking the initiative to bring about change. However, leaders of the organization that is turned in might not perceive the change as constructive. Closely related to encouraging whistleblowers is for leadership to make it safe for people to speak up about even minor ethical violations.