Training Employees on Whistleblowing

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Photo by Clem Onojeghuo on Unsplash

Who is a Whistleblower?

In common terms, whistleblowers are individuals, typically employees, who use free speech rights to expose abuses of power that betray the public trust.

Under the Whistleblower Protection Act (WPA), the primary law that protects non-intelligence federal employees, they are defined as employees who disclose information, either internally (to managers, organizational hotlines, etc.) or externally (to lawmakers, regulators, the media, watchdog organizations, etc.), that they reasonably believe evidences: i.e “Reportable Matter”: Reportable Matter includes:

1. General Malpractice

  • Abuse of authority
  • Breach of contract
  • Negligence causing substantial and specific danger to public health and safety
  • Manipulation of company data/records
  • Financial irregularities, including fraud or suspected fraud or Deficiencies in Internal Control and check or deliberate error in preparations of Financial Statements or Misrepresentation of financial reports
  • Any unlawful act whether Criminal/ Civil
  • Pilferation of confidential/propriety information
  • Deliberate violation of law/regulation
  • Wastage/misappropriation of company funds/assets
  • Breach of Company Policy or failure to implement or comply with any approved Company Policy

2. Potential Infractions of the Code of Conduct

3. Breaches of copyright, patent and disclosure of confidential data/information to competitors/outsiders.

Importance of Whistleblowing

Employees who sound the alarm about bad practices early enough can help to ensure that problems come to light before it is too late, thus helping to prevent disasters ranging from widespread customer mistreatment to loss of life. An organisation’s whistleblowing procedures should encourage individuals to disclose concerns using appropriate channels before these concerns become a serious problem, damaging an organisation’s reputation through negative publicity, regulatory investigation, fines and/or compensation. Examples of where concerns were raised but not listened to have plagued a range of sectors. Many high-profile reviews in the NHS have found that whistleblowers have been ignored, including at Mid Staffordshire Foundation Trust and Winterbourne View hospital. Scandals in the banking sector, e.g. excessive risk taking at HBOS, also featured whistleblowers who were not listened to.

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A wide range of industries are now routinely implementing whistleblowing policies and codes of conduct within their workplaces, providing their employees with a clear structure and direction on the procedures as required.  Unfortunately there are barriers to whistleblowing, most commonly because people don’t want to been seen as “snitching”, as they have a fear of retribution by fellow employees.  It is essential for businesses to provide a safe and trustworthy environment, so that their employees feel comfortable and protected when they have information to share.  That is why it is so important for top management to promote, demonstrate and commit to the inclusion of whistleblowing within their business culture. 

Protection to Whistleblower

  1. If one raises a concern under this Policy, he/she will not be at risk of suffering any form of reprisal or retaliation. Retaliation includes discrimination, reprisal, harassment or vengeance in any manner. Company’s employee will not be at the risk of losing her/ his job or suffer loss in
  2. any other manner like transfer, demotion, refusal of promotion, or the like including any direct or indirect use of authority to obstruct the Whistle blowers’ right to continue to perform his/her duties/functions including making further Protected Disclosure, as a result of reporting under this Policy. The protection is available provided that:
  • The communication/ disclosure is made in good faith
  • He /She reasonably believes that information and any allegations contained in it, are substantially true; and
  • He/She is not acting for personal gain

Anyone who abuses the procedure (for example by maliciously raising a concern knowing it to be untrue) will be subject to disciplinary action, as will anyone who victimizes a colleague by raising a concern through this procedure. If considered appropriate or necessary, suitable legal actions may also be taken against such individuals.

However, no action will be taken against anyone who makes an allegation in good faith, reasonably believing it to be true, even if the allegation is not subsequently confirmed by the investigation.

2. The Company will not tolerate the harassment or victimization of anyone raising a genuine concern. As a matter of general deterrence, the Company shall publicly inform employees of the penalty imposed and disciplinary action taken against any person for misconduct arising from retaliation. Any investigation into allegations of potential misconduct will not influence or be influenced by any disciplinary or redundancy procedures already taking place concerning an employee reporting a matter under this policy.

Any other Employee/business associate assisting in the said investigation shall also be protected to the same extent as the Whistle blower.

Need analysis and training

Transparency helps leaders, managers and employees to build and maintain a culture of accountability at work; something which is vital when protecting against fraud and misconduct.

  1. Provide an appropriate framework and protect staff who blow the whistle. It clearly demonstrates a commitment to maintaining a transparent and accountable culture. It also shows that the organisation takes misconduct seriously and reinforces the understanding that employees are encouraged to disclose suspected malpractice and misconduct
  2. Establish clear policies and guidelines. There is a significant association between employees’ knowledge of appropriate internal channels and the likelihood that they will report perceived misconduct. Employees must also genuinely believe that their concerns will be listened to and taken seriously.
  3. Invest in training for employees. One of the main barriers to employees reporting misconduct at work is a lack of awareness of existing policies and procedures, and knowing how to start the process in the first instance. Training can help to remove uncertainty, motivate employees, enhance counter-fraud armoury, and create a positive work environment.
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Standard Elements of a Whistleblower Policy

Since the passing of the Sarbanes-Oxley act and, more recently, the Supreme Court’s decision to expand whistleblower protection, companies have been adopting whistleblower policies to facilitate internal reporting and protect informants. 

After reviewing several policies from a range of organizations, we’ve compiled some of the core elements. Our intention is to give you and your company a jumping off point to start formulating a policy of your own.

So let’s start with the basics—what should you call your whistleblower policy?

1. A Whistleblower Policy by Any Other Name

While the answer to this question seems straightforward, in reality, it is much more complex. “Whistleblower Policy” might not be the best name.

Daniel Ellsberg, Bradley Manning and, more recently, Edward Snowden are all famous examples of whistleblowers. They are also examples of how the term can for some people denote paragons of civil service and to others represent the worst kind of traitor.

Because of this, it might be wise to call your policy something different. A couple ideas Meindertsma puts forward include a Speak-Up Policy, Employee Concern Policy or Issue Resolution Policy. That being said, a whistleblower policy by any other name should contain certain basic elements.

2. Core Sections of a Whistleblower Policy
In your whistleblower policy you need to define three basic elements: Why, what, and where. More specifically, why do you have a whistleblower policy, what merits reporting, and where/how the reports should be made.

Why

Before encouraging employees to speak up against ethics violations your company needs a strong ethics policy or code of conduct. The “why” is an integral part of your whistleblower policy. Here is an excerpt:

Assuring effective stewardship of the federal universal service programs by guarding against misuse or waste is a priority shared by USAC, the FCC, and Congress, as well as program applicants, service providers, and the general public. To that end, this page allows applicants, service providers, contributors, and others to alert USAC to instances when universal service support is possibly being misapplied or program rule violations might exist.

What

If you want to encourage your employees to speak up, then you need to tell them what to speak up against. Most policies use blanket terms like fraud, waste and illegal activity. These are fine to use but, depending on your industry, you may want to be more specific. Publicly traded company Parker Drilling clearly defines what kind of complaints and issues should be reported in their policy.

It states:

Employees of the Company have an obligation to report irregularities (whistleblower) of which they become aware and the right to voice complaints about questionable accounting, internal accounting controls and auditing practices, without fear that such report or complaint will impact their employment status, rate of pay or responsibilities within the organization. Reports of “irregularities” may include, but are not limited to, policy violations, theft or misappropriation of Company assets, the misreporting of accounting, financial or operational data, the failure to report health, safety or environmental violations, the violation of antitrust laws, the violation of the Foreign Corrupt Practices Act, the violation of anti-boycott laws, fraud, harassment, worker intimidation, the payment of bribes, the inappropriate granting or acceptance of gratuities, and other conduct which is illegal, unethical or contrary to the letter or spirit of Company policy. In addition to these irregularities, employees are encouraged to voice “complaints” regarding questionable accounting practices, internal accounting controls and auditing matters.

Where/How

Your whistleblower policy also needs to contain information on where and how employees should lodge their complaints. This can range from informing their immediate supervisor to a third-party whistleblower hotlineThe University of Miami’s policy is a good example of how to define where an employee should report their complaint.

Here is an excerpt detailing exactly how an employees should report a violation:

If an employee has knowledge of information that is in violation of any law, rule or regulation as described above, the employee is encouraged to contact his/her immediate supervisor, visit the ’Cane Watch website at www.canewatch.ethicspoint.com or call 877-415-4357, to provide information directly or on an anonymous basis to afford the University a reasonable opportunity to review and correct the activity.

Other Considerations

Beyond the why, what and where of a whistleblower policy there are two other consideration to take into account: Confidentiality and anti-retaliation.

Confidentiality

Most whistleblower policies have an added clause about maintaining the confidentiality or anonymity of the whistleblower.

It is important to note that these clauses also state anonymity will be maintained to whatever extent possible.

Anti-Retaliation

All whistleblower policies contain anti-retaliation clauses. These clauses explicitly state that whistleblowers cannot be retaliated against for their whistleblowing. The also clearly define what retaliation looks like.

Not only is this ethical but it is a federal law contained in the Sarbanes-Oxley Act and many other statutes.

Always Seek Legal Counsel

When thinking about your company’s whistleblower policy, these are all good places to start. However, this is by no means an exhaustive list and you should always consult legal counsel before finalizing any whistleblower policy.

Conclusions

Journalists and whistleblowers working together are essential to maintaining a robust democracy and holding institutions accountable through an informed citizenry. Supporting whistleblowers through best practices that recognize the professional risk involved with reporting wrongdoing will ultimately serve the best interests of both the employees and journalists in their shared goals of advancing the public’s interests.

References & Credits:

  1. https://www.whistleblowers.org/know-your-rights/
  2. https://www.continentalmessage.com/blog/standard-elements-of-a-whistleblower-policy/index.php?option=com_content&view=article&id=999&Itemid=1255
  3. https://umshare.miami.edu/web/wda/policieshr/WhistleblowerProtectionStatement.pdf
  4. http://www.parkerdrilling.com/whistleblower.aspx
  5. https://www.iia.org.uk/resources/ethics-values-and-culture/whistleblowing/ research-report-whistleblowing-and-corporate-governance/
  6. http://www.creamlinedairy.com/WhistleBlowerPolicy.html
  7. http://www.winrocommercial.com/policies/ Policy%20-%20Whistle%20blower%20&%20Vigil%20Mechanism.pdf
  8. https://www.eradar.eu/public-interest-disclosure-act-1998/
  9. http://www.stcipd.com/UserFiles/File/Whistle-Blower-Vigil-Mechanism.pdf
  10. https://www.janabank.com/images/policies/whistleblower-policy.pdf

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