Some of the world’s largest corruption investigations over the last decade have been instigated by information provided by whistleblowers. Despite this, many organisations lack the appropriate whistleblowing processes and procedures necessary to encourage employees to come forward so that information concerning corporate wrongdoing can be brought to light early and addressed before becoming a scandal.
In order to achieve a culture of integrity, and in the interests of good governance, it is necessary that internal processes provide appropriate information, resources, and training to all parties involved in a case of suspected wrongdoing. Employees need to feel confident that their concerns will be listened to and acted upon; managers and compliance professionals need resources and training to be able to report on and to be aware of any possible risks; and CEOs and Managing Directors need access to appropriate information so that they can be aware of non-compliance within their organisation.
Having best practice whistleblower programs and procedures in place, and understanding how these work, is necessary to ensure that staff at all levels share responsibility and accountability for their organisation’s culture and compliance practices.
One of the key reasons for establishing robust internal whistleblowing practices is that it helps to ensure that instances of non-compliance and wrongdoing are resolved internally, and are turned into an opportunity to help an organisation’s corporate culture to improve.
As Dennis Gentilin of Human Systems Advisory recently stated, “Whistleblowing is not just about wrongdoing that ends up in the media because it is poorly handled. It is about how companies use whistleblowing to identify and address problems prior to them deteriorating into significant scandals. Ultimately the goal is to build a culture where those problems are swiftly and appropriately dealt with.”
Employees need to feel confident that their concerns will be listened to and acted upon.
There is significant attention at present on what best practice whistleblowing processes and procedures should look like. There is ongoing scrutiny of the requirements placed on public sector organisations under the Public Interest Disclosure Act 2013 (Cth), and it is likely that protections for whistleblowers in Australia’s corporate sector will be significantly strengthened as the result of a major reform process currently underway. In addition, an International Standards Association (ISO) technical committee has been formed, of which Australia is a part, to design a global best practice whistleblowing standard.
Feeding into this reform is a large empirical research project, Whistling While They Work 2, which is gathering data on the strength of whistleblowing procedures in Australia. This research project, involving both Griffith University and the Australian National University along with two other universities and 23 partner organisations (Including ASIC and the AICD), has already gathered evidence from 702 organisations across Australia and New Zealand.
Preliminary findings highlight the extent of challenges faced by businesses in trying to improve their whistleblowing and integrity regimes.
Encouragingly, the research found that 90 per cent of organisations have some processes in place for ensuring appropriate investigations and management action in response to wrongdoing concerns raised by staff. However, 23 per cent of organisations have no particular support strategy in place for staff who raise wrongdoing concerns, and over 80 per cent do not have processes for providing compensation or restitution to whistleblowers who suffer detrimental outcomes as a result of their disclosure. This data is useful in helping governments and companies target the specific issues in whistleblower systems that need to be improved.
A second opportunity exists for companies to become involved in this project through Integrity@WERQ, which is a survey of employees, managers and directors. The results of this survey will not only enable an assessment of whistleblowing processes generally, but will offer the organisations involved a unique insight into the experience of those managing and reporting wrongdoing within their organisation. Practical advice will also be available in the form of a report on how to address any issues or concerns found in the results.
The research is perfectly timed to inform current debate around whistleblowing practice and policy. With a Senate inquiry due to report by 30 June, and a new global standard on whistleblowing processes being developed, the data in this research will provide a sound empirical basis to inform the development of a new corporate whistleblowing framework in Australia.
In the context of this historic reform opportunity, there has never been a better time for directors and managers to review their own organisation’s whistleblower policies and practices.
For more information on the Whistling While They Work 2 project or to discuss having your organisation participate, visit the project website or contact WWTWadmin@griffith.edu.au.
Kath Hall is an Associate Professor at the ANU College of Law. Dr Hall is an expert on transnational corporate corruption and foreign bribery regulation and a Chief Investigator for Whistling While They Work 2.
AJ Brown is a Professor of Public Policy and Law in the Centre for Governance and Public Policy, Griffith University. Prof. Brown is an expert on public integrity systems, including public interest.
Last year Professor Brown came into the AICD to talk about the early results from the Whistling While They Work 2 project.