In a world where headlines about corporate misconduct seem to surface every other day or week, it is clear that unethical behaviour is no longer an issue kept under wraps. We’ve seen this play out repeatedly with significant detriment to many organisations, serving as a poignant reminder that corporate misconduct is more common than imagined, even in countries with stringent regulations and strong corporate governance like Singapore.
This begs the question, why didn’t anyone listen? Were there no avenues of redress within the organisation? Or did employees fear retaliation and reprisal when speaking up? In an era where dirty laundry can be aired with a click on social media, organisations need to be more responsive and cultivate an open speak-up culture with effective whistleblower policies that can serve as an organisation’s first line of defence against misconduct, fraud, corruption, and wrongdoing.
While whistleblowing and corporate misconduct has been largely seen as legal and compliance issues, handled by ethics and compliance professionals and departments, it is also essentially a people and culture issue: the main domain of HR departments. A successful whistleblower programme doesn’t start with the complaint itself; it begins with setting the tone and culture right for speaking up, backed by appropriate channels, policies and procedures that allow employees to speak up without fear and to have their concerns addressed fairly, quickly and consistently.
Whistleblower programmes will greatly benefit from the involvement of HR departments, ensuring the culture is in place and people are protected. In fact, HR grievances are estimated to be the most reported issue through whistleblowing channels, alongside other people issues that include discrimination, harassment, and bullying.
The impact on people and culture
A recent news article highlighted a gruelling account from a whistleblower who endured significant pushback and adverse consequences as a result of speaking up against a member of senior management’s fraudulent activities. Despite holding the title of Head of Legal for Asia- Pacific, he faced intimidation and retaliation from within the organisation and the wider industry, with threats that negatively impacted his career, and took a heavy toll on his mental health.
This is not an isolated case. Other cases that expose the failings or a lack of whistleblower programmes thread through organisations both big and small, often seeing a variety of internal and external impacts. These range from employee morale to productivity, reputational damage, growing distrust with leadership, and even an exodus of talent or loss of business. Often, incidents later reveal many missed opportunities to remedy misconduct, fraud or other problems before they burst into public view or cause regulators to investigate. Whistleblowers are the first line of defence in mitigating risks.
With employees at the forefront of identifying and mitigating red flags at the earliest possible opportunity, a comprehensive whistleblower programme with a robust internal framework will boost an organisation’s ability to effectively prevent grievances from snowballing into major scandals.
With the complexities and nuances of whistleblower programmes, the task of HR professionals is not to be underestimated. They are well-placed to shape an organisation’s culture and ensure that its people are protected when sharing their concerns or grievances.
So, what does a good textbook whistleblower programme look like?
Accessibility – A good whistleblower programme should have ample feedback channels to cast its web far and wide while striving to be user-friendly, providing employees with the option to select their most trusted mode of communication to sound the siren on potential illegal or unethical acts. It should also have the option of anonymous reporting, a feature required, for example, under some US laws and widely embraced elsewhere to promote reporting. Recognising that accessibility is the first step, many professionals surveyed (42%) in LRN’s annual E&C Programme Effectiveness Report had expanded their hotlines into helplines, allowing those who speak up to not only discuss and identify misconduct but also to seek guidance or get assistance. Readily available tools such as an online reporting system operational 24/7 with multi-language capabilities will allow employees to submit reports anytime, anywhere (even outside of working hours) in the time spaces they feel most safe to do so.
Comprehensive compliance training – Employees may not always be able to spot misconduct, and cultural influences can also come into play, for example with cultures that place a high value on deference to seniors and elders in the workplace. HR departments need to take these into account and look into ongoing training to ensure all employees can recognise misconduct, understand the importance of the whistleblower programme, know how it works, and feel comfortable using it.
Transparency and protection from retaliation – Trust and transparency form the cornerstone of any successful whistleblower programme. HR plays a vital role in shaping a company’s culture and instilling trust in employees. This can be done by demystifying how hotline or helpline matters are handled and providing guarantees of anonymity and non-retaliation. Senior leadership should also regularly communicate the successes and impact of the whistleblower programme within the organisation through the sharing of anonymised case
studies that illustrate its role in maintaining ethics and compliance. Part of an organisation’s responsibility in creating a safe space for employees, whistleblower programmes must also include anti-retaliation policies and measures to safeguard those who speak up from adverse consequences.
Even-handed consequences for misconduct are paramount – The effectiveness of whistleblower programmes also depends upon holding everyone to the same standard or behaviour, including senior executives and highly-successful employees. According to LRN’s Ethics & Compliance Report, more than two-fifths (44%) of organisations surveyed had disciplined or terminated the employment of a senior executive or top performer in the past year for unethical behaviour. Trusting that their organisation will take fair action against misconduct
and address grievances will help assuage fears of speaking out.
Protecting whistleblowers key to organisational success
No organisation is immune to misconduct, and everyone has a part to play in a well-oiled whistleblower programme that can protect both the organisation and its stakeholders. Organisations that operate successful whistleblower programmes detect fraudulent activities far more quickly – within a year on average, compared to 18 months for those that don’t. With people and culture high on the corporate agenda, fostering a culture where employees feel safe to report misconduct will not only mitigate legal and reputational risks for organisations but also further strengthen an organisation’s HR foundation and sustainable business success.
About the author
Susan Divers, Senior Advisor at LRN Corporation, has more than 30 years’ experience in the ethics and compliance arena, including building state-of-the-art compliance programs and designing powerful employee engagement methodologies.
She also has substantial expertise in anti-corruption, export controls, sanctions, and other key
areas of compliance.
