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Liability for failing to provide adequate company protection now extends beyond damage to brand and image and penalties and fines to the company, to loss of personal liberty and substantial fines for Directors, Officers and Managers.

Whistleblowing is a means of company protection by which Directors, Officers and Management can tap into a vital information source provided through the eyes and ears of employees and those with whom business is done i.e. vendors, suppliers and customers etc.

The Australian Standard AS8004-2003 Whistleblowing Protection Programs for entities lists nine different reportable conduct types. These include dishonesty, fraud, corruption, illegal (e.g. theft, drug use/sale, violence and criminal damage), breach of Commonwealth/State legislation or local authority by-laws (e.g. Trade Practices Act or Income Tax Assessment Act), unethical, unsafe workplaces and causing financial or non financial loss detrimental to the interests of the entity.

Directors, Officers and Managers have the ultimate Duty of Care to prevent a breach of the relevant legislation.

The larger a company with locations across Australia, the more complex it is to undertake company protection as the ability to control the environment is reduced.

Under NSW Occupational Health and Safety legislation if a company contravenes any provision of the Act, each Director and person concerned in the management of the company is considered to have contravened the provisions, unless they can show they were not in a position to influence the company. Hefty penalties can be imposed on those found guilty with a maximum penalty of $1.65 million for the company and $165, 000 for an individual and/or 5 years jail (no leniency for first time offenders).

At a recent meeting convened by the Safe Work Australia Council representing each of the States and Territories, it was agreed that the only way forward is to have a consistent approach to OH&S laws Australia wide, with NSW law most likely to be the benchmark.

Breaches of the Trade Practices laws, such as misleading advertising, deceptive conduct, price fixing and market share can occur through dealings with consumers or interaction with competitors and you as the Director, Officer or Manager may be unaware. False or misleading representations by companies or individuals can lead to penalties, fines and damage to reputation with fines of up to $1.1 million for the company and $220,000 for an individual. In the eyes of the law, price fixing is considered as theft and individuals and companies will pay. The recent air freight investigation by US regulators revealed price fixing, which saw nine international airlines, including Qantas pay $1.25 billion in penalties.

Laws on harassment and other forms of discrimination apply to all employees of a company. The legal doctrine of vicarious liability means employers are legally responsible for the discriminatory acts of their employees. The ramifications can be significant as evidenced in March 2008 when former PricewaterhouseCoopers (PwC) partner Christina Rich reached a secret out of court settlement in her $11 million sexual harassment case against PwC.

Employee theft or fraud is directly related to the Directors’ and Officers’ responsibility to create the right environment to ensure that sufficient company protection controls exist. CEOs and CFOs must make a written declaration to the Board that the financial statements are in accordance with the Corporations Act 2001 and Accounting Standards, that the statements present a true and fair view of the company’s financial position and that the company’s financial records have been kept in accordance with the Corporations Act 2001.

Real-time feedback

Your Call´s online 24/7 reporting systems, Your-Alert and Your-Say, allow Directors, Officers and Management to listen and respond quickly, in one place and in a timely manner to the concerns (alerts), complaints and suggestions provided by your employees, customers, suppliers and other stakeholders, thereby eliminating the reactive approach necessitated by off-line reporting systems.

Unrestricted access has been proven to encourage reporting that leads to the earlier detection of fraud/theft of company funds, stock and equipment and occupational health and safety breaches. This results in a more viable business and a safer and happier workplace. Your-Say has the added potential of uncovering valuable operational and management suggestions, thereby delivering increased business growth.

It provides Directors, Officers and Management with three company protection tools in one: – deterrence, compliance/behavioural monitoring and risk mitigation.

Fears of frivolous or mischievous reporting have not been substantiated and Australian Standard AS8004 2.3.10 provides for action against false reporting by a person purporting to be a whistleblower. A successful whistleblower program relies on all information being investigated, and all whistleblower systems should be “sold” with that message.

To trust existing internal reporting systems without developing a whistleblower program overlooks the fact that despite one´s best efforts, unfortunately some people inherently distrust their employer and government. A complementary external model maintains the employers´ responsibility to their employees and provides the balance needed to achieve optimal levels of reporting.

Despite the best systems, the ability to control the environment is limited. Control is often intertwined with an over emphasis on, or is replaced completely by, trust.

Having a whistleblower system in the company is no longer a matter of “Oh, it’s nice to have”. Now whistleblowing equals demonstrated Corporate Social Responsibility and therefore protection to the employees, the business, Boards and Directors.

Get Started?

If you’re looking to implement an effective real time employee reporting or whistleblowing and feedback service that will provide added company protection, click here to email us and download our FREE The Ultimate Whistleblowing Checklist on how to establish a best-practice whistleblowing program, or call 1300 788 712 to discuss how Your-Call can best benefit your organisation.