Are your staff confident enough to report their concerns?

Effective whistleblowing management

Mitigate risk and reinforce transparencyAn organisation works most effectively with a transparent, honest and accountable culture. Such a culture enables staff to be proactive in addressing their concerns, without fear of reprimand.

As a firms’ first line of defence, a workforce holds the most amount of information regarding firms operations and day to day running so listening to them is critical.

The media has drawn attention to some high profile, poorly managed whistleblowing scenarios in the last year. Situations where a toxic culture that had led to issues and concerns either being ignored, or where whistleblowers have been criticised or punished.

Having a structured and visible whistleblowing programme is often not enough however. Organisations must ensure that measures and mechanisms for raising concerns are integrated and robust, so the culture empowers rather than intimidates.

A robust and well-structured process can have numerous benefits including:

• fraud detection: it may help early detection of fraud activity and avoid large scale crime over time.

• good corporate governance: highlighting necessary risks to the business that would otherwise not be raised at board level;

• reputation: having a transparent and honest culture helps prevent public and external whistleblowing;

• compliance: supporting compliance with the UK Bribery Act 2010;

• consistency: having a consistent approach to investigating wrongdoing; and

• independence: removes bias and risk to whistle-blowers.

Considerations of an effective program

Top down approach:Setting a tone from the top is crucial in developing this type of programme, it allows staff to feel safe in their environment and means values are embodied by, and filter down through the organisation. Clear statements of intent from the CEO to add support ensures it reflects the culture of the business.

Staff engagement and integrationStaff need to be able to recognise the value in expressing concerns and in the mechanism through which they do it. An independent reporting channel gives an organisation added benefit and credibility in its processes, as often staff feel more comfortable raising concerns to a third party and not to a member of staff within their business.

Communication and training Logistically, communication is pivotal. Staff need to have a full and comprehensive understanding of the processes and platforms they can utilise to credibly raise concerns in the workplace. Those in management positions need it understand the processes for handling such matters correctly and the importance of taking matters seriously with priority.

Independent InvestigationsInvestigation of any concern raised need to be treated in confidence and dealt with by an appropriately trained member of staff whether internal or external to an organisation. It is critical that investigations are completed by staff independent of the concern; this is to avoid confrontation and ensure trust in the process.

What action should you consider?

Transparency championAllocating or encouraging a transparency or whistleblowing champion shows an open and willingness to deal with any issues staff may raise. It also holds the firm much more accountable for any issues raised which is critical.

Training Providing training across an organisation at all levels is the key. This should include the board, audit committee, managers, human resources and investigation teams. Relevant members of staff need to awarded the knowledge to be able to bring matters to attention of those that need to know, and resolve them in line with policy and any legal obligations. Managers need to understand their responsibilities in handling reports appropriately and how to support those who report their concerns.

PolicyPolicy, process and reporting should support good corporate governance and reflect the necessary legislation and best practice that underpins this important process.

Independent investigationDelivering an independent investigation service to review and investigate concerns improves cost efficiently. This provides a quick response to potentially complex concerns and can avoid reputational damage, both for an organisation and for individuals.

By using an independent professional investigator, an organisation can act on facts to make an informed decision on next steps and best practice.

This will also provide assurance to whistle blowers that matters will be taken seriously and investigated professionally.

Whistleblowing helplineIn having an independent whistleblowing helpline, businesses enable their workforce to report possible unethical, illegal or improper conduct. It removes bias from any potential follow up or investigations and not only facilitates good governance and ethics practice, but goes some way to protect against potential future litigation action.

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Case studies

Sector - Education

Issue

Conflict of interest and financial impropriety raised by whistle-blower

Issues identified:

• Appointed family members to positions

• Arranged trips to Ireland over 5 years

• Large overspends on maintenance and services contracts with a single supplier

• identification of £500k of renovations works in home address

• Evidence revealed:

• False invoicing, conflicts of interest, abuse of position

• Evidence gained from interviews, emails and background due diligence

• Subject dismissed from role, subsequent prosecution proceedings dropped by Crown

Sector - Corporate / Logistics

Issue

• Anonymous referral received via whistleblowing reporting line

• Alleged several serious allegations against senior Board member involving bullying and harassment

Issues identified

• Sensitive investigation required careful planning and identification of evidence

• Approach to mitigate risks to client, identification of referrer and reputation of subject of allegation

• Review of large volumes of data, e-discovery reviews, carefully managed interviews with several staff and managers

Outcomes

• Specific allegations were unsubstantiated

• Several lessons learned with management style, design and implementation of change management programme

• Improved communications approach and staff engagement recommended

For further information contactRSM 25 Farringdon Street London EC4A 4AB