Whistleblowing

Whistleblowing has long been regarded more as an act of disloyalty than as an essential management tool and a means of safeguarding corporate reputations.

However, growing difficulties involved in uncovering fraud, theft and other misconduct are prompting many to accept that whistleblowing may be the single most effective way to deter, detect and disrupt such behaviour.

Vulnerable firms

This changing approach applies particularly to foreign subsidiaries of banks and resources companies, which are often targeted by transnational organised criminal networks.

Companies in these sectors also readily attract adverse publicity for perceived human rights and environmental abuses.

Since no compliance or management system can detect every irregularity, it makes sense for organisations to encourage employees to report their concerns fully and promptly, through appropriate channels, while the matter is still relatively easy to fix.

Yet organisations which do introduce whistleblowing procedures frequently find that employees do not report what they know.

Fear of retribution

Common constraints are a sense that nothing will ever change and a fear of retribution from managers and co-workers, particularly in cases where disclosure may jeopardize jobs.

This has prompted many employers to publish statements declaring how committed they are both to investigating reports of misconduct and to protecting those who blow the whistle.

However, employees often suspect that such assurances are as easy to give as they are difficult to enforce, and that even statutory safeguards may offer scant protection.

Organised crime

The growing prevalence and influence of organised crime is a major concern, particularly in many African countries. Organised criminal gangs do not have to be involved in a suspected irregularity for potential whistleblowers to fear that they may be.

The uncertainty over who may be behind instances of serious corporate misconduct can easily become a self-fulfilling anxiety, with organised crime quickly exploiting the opportunities created by employees’ reluctance to report even blatant criminal acts.

Absolute confidentiality

The only way to arrest such a development is for organisations to ensure that the independence and confidentiality of whistleblowing reporting procedures are as absolute as possible - and that they are perceived to be so by employees.

Similarly, to protect those who may be falsely accused, any information supplied needs to be confidentially screened and sensitively investigated.

Tailored solutions

Procedures need to be carefully tailored to each employer’s particular circumstances and to have the unequivocal support of the board of directors.

Intensive training is usually also required to ensure that related policies are fully and properly implemented.

What we do

We provide a range of services to those seeking to encourage responsible whistleblowing:

Advice: We advise on whistleblowing policies and procedures; on how to enhance their integrity and credibility, and on how to forestall related criminal/regulatory investigations and unfair dismissal claims.

Workshops: We conduct training and awareness workshops to highlight the importance of whistleblowing; to explain its uses and abuses; and to change staff attitudes to whistleblowers.

Hotline: We also provide a comprehensive, independent and confidential whistleblowing 'hotline' facility and screening service, to allow staff and othes to bring suspected irregularities to the attention of management, without fear that their identities may be disclosed.

EEE Lex has an in-depth understanding of both the legal and practical difficulties involved in persuading employees to report what they know, and to do so both responsibly and promptly.

We bring an international and multi-disciplinary approach to what to many may at first seem a fairly clear-cut issue, but which is possibly one of the most complex challenges of modern management.

Benefits to employers

An effective whistleblowing framework is risk management at its most basic, at a fraction of the cost of the alternatives.

It is also fundamental to good governance, corporate reputation, social and environmental responsibility, labour relations, regulatory compliance, and investor confidence.

More stringent anti-bribery laws mean that firms need to monitor the actions of third parties just as closely as those of their own employees, as prosecutors are increasingly looking to hold firms liable for the acts of agents or counterparties who may be beyond their jurisdiction.

Resource companies and the financial services sector are obvious targets for prosecutors.

That regulatory fines of tens and even hundreds of millions of pounds are increasingly commonplace underlines the importance of encouraging staff to report wayward practices as promptly, as fully and as responsibly as possible.

Since prosecutors are increasingly granting leniency or immunity for voluntary self-disclosure, few organisations can afford not to have the earliest possible warning of misconduct that could attract an investigation, or worse – a media trial in the court of public opinion.