Home » Whistleblowing: Get It Right and Everyone Wins

Why would your organisation need a policy?

The legal impetus behind the need for a working whistleblowing policy now comes from a number of directions:

for companies with a US listing, the requirements of the Sarbanes-Oxley rules;

for Australian listed companies, the ASX Corporate Governance Council recommendations;

the draft Australian Standard 'Whistleblowing Systems for Organisations'; and

for all Australian organisations, the Federal Criminal Code requirements for a 'culture of corporate compliance' and equivalent state and territory initiatives (such as the ACT Crimes (Industrial Manslaughter) Amendment Bill 2002).

The practical impetus is stronger still because:

It maximises the chance of the company becoming aware of (and controlling) problems before they reach the public and the regulators.

It can identify problems and allow them to be addressed before they escalate to organisation-threatening proportions.

It makes individual employees at all levels feel that their opinions are respected.

It promotes more democratic decision-making practices within the organisation, which leads to a healthier corporate governance system overall.

A whistleblowing policy is at the heart of a culture of corporate compliance. By promoting a strong policy, your organisation sends a clear message to all staff and others that compliance is fundamental to the long-term success of the organisation.

How is it implemented?

The aim of an effective whistleblowing policy should be to create an environment where people feel safe discussing concerns they may have about compliance within the organisation.

This means sending a clear message to potential whistleblowers that responds to the concerns that would otherwise stop them from coming forward. Questions potential whistleblowers might ask include: What sort of concerns can I raise? What evidence do I have to have? What will happen to me? What will you do about my concerns?

An effective whistleblowing policy will also be transparent. The organisation should be seen to be responding positively to concerns raised, and acting both to protect the whistleblower and fix the problem.

Implementing a whistleblowing policy has several phases:

Assessing the existing culture of the organisation and the sort of policy that is most likely to be effective within that environment. This is one occasion when 'best practice' should not be followed if it is not consistent with the existing workplace culture.

Deciding on the scope of the policy: will it apply to overseas workplaces? Will it apply to contractors, customers and other stakeholders as well as to staff? What will be the limits on the type of concerns raised?

Establishing the resources to promote whistleblowing and deal with people who come forward. A documentary procedure statement will need to be settled and the procedure communicated to stakeholders.

Communicating the procedure and the options available to those who have concerns. You will also need to ensure that within each workplace there are no obstacles to the policy working effectively.

Dealing with initial concerns in a way that reinforces the message that the organisation will treat legitimate whistleblowers and their concerns constructively.

Periodic reviews of the policy and procedure to ensure that they are working effectively.

Who should be responsible?

In light of the current legal impetus and the public support for these matters, a whistleblowing policy should be a core part of your organisation's compliance policy. The directors should take ultimate responsibility for this policy and be involved in its establishment and periodic review.

Inhouse and/or external legal counsel will be needed to ensure that the legal aspects of the whistleblowing policy are fully considered in the establishment phase. Counsel should also be involved in any investigation, in response to a concern raised, of possible illegal acts or criminal offences.

We would recommend that a particular person or people be appointed to receive any concerns raised by staff and to supervise investigations. Choosing the right person (or people) and providing them with adequate resources is critical to the success of the policy.

The human resources department should be involved for the personal career elements of the policy, to assist in helping any person who comes forward and to integrate compliance issues generally with staff review processes.

In the end, responsibility for ensuring that the policy is respected, and that people who have concerns feel the policy can be relied on, needs to be brought home to line managers and supervisors in each workplace.

It is too easy to become evangelical about whistleblowing and forget that it has a darker side. Promoting whistleblowing needs to be done carefully to avoid opening the doors to an institutionalised gossip session. There is a legitimate line to be drawn between telling tales and ensuring that the workplace is meeting the organisation's compliance standards.

AAR can assist you with many aspects of developing and implementing a whistleblowing policy. Contact our corporate governance team for more information.