Blowing the whistle by encouraging a culture of ethics where employees can safely speak up as soon as they detect unethical practices
A September 2014 independent assessment by non-profit organisation Blueprint for Free Speech rejuvenated debate in the compliance industry when it found that a considerable number of the world’s G20 countries have no specific laws protecting people who flag illegal activities or unethical conduct such as corruption, bribery and fraud within a private or public entity.
Every year well-known companies are fined hefty sums of money by regulators, reach expensive settlements or have their reputations tarnished after they are found to have engaged in unethical business conduct. And, because there are no laws to protect them, the people who witness these wrongdoings are afraid to report or expose such conduct, meaning the illicit practices often go on for a long time before they are eventually detected by internal or external auditors.
Debate around whistleblower protection has been going on for some time. While selected countries have actioned this by enacting whistleblower protection laws, others have proposed or drafted laws, and some are in consultation stages with key stakeholders.
For example, in Argentina, Brazil, Germany, India, Indonesia, Italy, Mexico, Saudi Arabia and Turkey, there are no enacted whistleblower protection laws to protect truthtellers from reprisal or retaliation. In countries where whistleblower protection laws are being proposed, there is little or no publicly-available information to indicate when such proposals will become law.
The lack of enacted laws in countries considered as developed, democratic and socio-economically stable, including the United Kingdom, France and Germany, is a source of concern because it serves as a bad example to countries seen to nature a poor compliance culture, like Saudi Arabia, Estonia, China, Nigeria and Ecuador.
Even in jurisdictions where whistleblower protection laws exist, like in the United States, Australia, Russia and South Africa, the financial rewards awarded for anonymously reporting and exposing such vices are very little or uninspiring, to the extent that whistleblowers do not report wrongdoings and illicit activities go unreported.
DOING THE RIGHT THING
Before whistleblowers report illegal activity within an organisation, they will first weigh up their safety options and determine what is at stake for them. Whistleblowers will normally ask themselves a series of personal and professional questions before they decide to report a wrongdoing, such as:
- Is what our organisation doing right and within the prescribed laws?
- Does our organisation have a reporting platform and, if so, does it guarantee anonymity?
- Will I be safe if I report the wrongdoing within our company?
- Am I legally protected if I am exposed?
- Should I report the wrongdoing to internal authorities or external regulators?
- Which reporting options are available for me to report the wrongdoing?
- Would I receive a reward for reporting the illegal activity, apart from personal fulfilment?
- Is money a motivating factor for me to report the illegal act?
- Will I continue to serve in my role/career/industry if I am exposed as a whistleblower?
- Will I become a target of retaliation, harassment or intimidation if I am found to be the person that reported the wrongdoing?
- What legal options and resources do I have?
- It is ethically and morally right to report illegal behaviour in the company I work for?
- Should I let an outsider report the wrongdoing in our company? Would the outsider be protected? Are they trustworthy?
Whistleblowers want to feel legally protected, suitably rewarded and guaranteed to be safe after they report illegal behaviour within or outside their organisation.
PRIVATE SECTOR–LED INNOVATION
While the lack of existing whistleblower protection laws in some countries may be seen to deter from a culture of high ethical standards and integrity in private and public organisations, some companies and civic organisations are taking steps further by developing tools and solutions that encourage whistleblowers to report wrongdoing anonymously and without fear of exposure. Even in countries where there are no whistleblower protection laws, companies are investing in tools, solutions and platforms that can help employees, truthtellers and general citizens report unethical conduct without paying the price.
One tool that has been developed by The Red Flag Group uses artificial intelligence to conduct cognitive interviews with whistleblowers, to help companies take faster and more successful investigation steps.
IntegraCall® is a secure compliance hotline platform that is knowledgeable, trustworthy and ‘compliance intelligent’. The platform offers an advanced case-management tool designed by investigators and compliance officers to manage incidents from beginning to end, throughout case triage, conducting investigations and implementing remedial actions.
Given the seemingly slow pace at which whistleblower protection laws are being enacted in most countries, including G20 countries, companies should not be deterred from formulating and implementing certain reporting mechanisms, including:
- encouraging a culture of ethics where employees can safely speak up as soon as they detect unethical practices
- formulating robust reporting protocols that allow whistleblowers to report illegal acts without fear or retaliation
- establishing clear and enhanced investigation procedures to quickly and efficiently identify allegations that require investigating
- acting on every anonymous tip, whether from within or outside the organisation
- promoting culture change within company structures
- embracing the latest disclosure and reporting technologies on the market.
While the judgment was by a single judge in the High Court, and thus subject to appeal (which is understood to be likely), it does raise some significant questions for companies about how they should approach investigations.
Based on the changes, a sensible approach would be to view internal investigations as compliance matters, focusing on creating transparency and improvement of processes, rather than immediately viewing them as litigation matters. This means internal materials will be drafted as if they will be read externally, while also putting the company into a good position to be awarded discounts or deferred prosecution by a court in the event that the investigation goes further.