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A whistleblower policy, supported by an external reporting program, strengthens any organisation’s ability to detect fraud, corruption and other illegal or inappropriate behaviour, reach early resolutions and manage risk.
No matter the size of an organisation, its reputation, its employee demographics or the type of industry, illegal and inappropriate behaviour can run rampant – usually much to the surprise of the board of directors.
Anti-corruption measures and whistleblower protection laws were a talking point in the lead-up to the recent B20 and G20 summits. As Michael Andrew, former global chairman and CEO of KPMG, said: “If corruption were a business, it would be the third-largest industry in the world.”
With an increase in public awareness and willingness to ‘lift the lid’, organisations need to encourage a culture centred on ‘speaking up’ to help detect issues before they grow into seismic risks. In an instant, media attention can ruin an organisation’s reputation and may have a severe financial impact.
External whistleblower hotlines, and the more modern alternative, external online reporting, are critical elements in an organisation’s governance/compliance toolkit.
Implementing a whistleblower policy is included in the third edition of the ASX’s Corporate Governance Principles and Recommendations and is a mandatory requirement in some industries. It’s not a new concept, especially in the public and not-for-profit sectors.
Despite this, many organisations in Australia still don’t have adequate policies or a fully efficient external reporting program.
Employee tip-offs and disclosures
It can be difficult to ensure your organisation is completely compliant, adequately following procedures and promoting the proper culture conducive to minimising fraud and inappropriate behaviour.
One of the best ways to become aware of such activities is via employee tip-offs and disclosures. The Australian cliché “don’t dob on your mates” is losing its appeal, with more employees feeling comfortable with their moral obligation and duties to their employer in this respect.
The key is encouraging employees to make disclosures internally, or, if they are not comfortable with that, to rely on a trusted external service provider.
It’s not only acts of fraud and corruption that can be reported under a whistleblower policy. Bullying, harassment, workplace safety and a range of other conduct types should be included.
Importantly, if an employee knows a manager is abusing a fellow employee, for example, they should be able to initially report the behaviour without fear of vilification. An external whistleblower procedure (in addition to following other legal processes) can be a confidential way of ensuring this. It helps employees feel respected and confident in making secure reports to senior management, potentially even of an anonymous nature if appropriate.
Culture and training are the cornerstones to successful whistleblowing policies and external reporting programs. It takes time and persistence to embed a compliant ‘speak up’ culture in an organisation.
Strategies can include in-person or video training, testing, induction/exit interviews, ongoing surveys and various promotion techniques. Further to this, creating a ‘learning culture’ with senior executives enables an organisation to improve on deficiencies and further treat potential risks.
Employers should never forget that it takes only one serious disclosure to corrode years of operational excellence or progress. Active whistleblowing policies and procedures and a preparedness for investigating, resolving and learning from disclosures is key to the long-term viability of any organisation.
How can I protect my organisation from commercial and reputational risk?
A robust compliance program requires an effective whistleblower program and multiple reporting pathways.
Get started today, by speaking to a Your Call expert and downloading our free Whistleblower Program Checklist or brochure.