Whistleblower Programs Add Value
While there has been plenty of attention in the media regarding whistleblowers and the cost of fraud to businesses, what has not been a focus is the value of establishing a strong whistleblower framework within risk programs and corporate governance structures.
The recent Crown Resorts inquiry found that rather than building a strong whistleblower culture and providing the appropriate whistleblower protection to Crown employee Jenny Jiang, it was found Crown’s reaction was to dismiss her claims and try to discredit the whistleblower publicly. It is now very transparent what the cost to Crown has been for not having appropriate whistleblower response procedures – new Sydney casino licence at risk, two more public inquiries, brand and director reputational damage and significant financial costs, fines and penalties.
Benefits of strong whistleblower framework for organisations.
The Association of Certified Fraud Examiners suggests 43% of all frauds are detected by tip-offs. While conducting previous whistleblower audits, JNW have seen that timely whistleblower audits can often uncover both poor culture and inappropriate practices occurring within your organisation.
Properly constructed Whistleblower Policies empower employees by giving them a pathway to disclose poor culture or possible wrongdoings. This ultimately helps to protect and enhance an organisation’s reputation, and likely reduce monetary consequences.
Is your organisation’s whistleblowing framework effective?
Public companies, large proprietary companies, and corporate trustees of APRA-regulated superannuation entities are required to have a whistleblower policy that is compliant with the Corporations Act. A strong whistleblower framework should include:
- A board approved policy that complies with legal obligations (including protection of whistleblowers), supported by a framework that details roles and responsibilities, the steps that will be taken and what will happen upon receipt of information. It should also be clear with regards to the consequences of wrongdoing/breaching policies
- Regular communication/training to staff and visibility of senior officers support of the policy. This will encourage reporting with an aim of early identification of either systematic or recurring wrongdoing
- 24/7 reporting line, ideally to an external, independent skilled third party. This will support anonymity and confidentiality
- Protection and support of the whistleblower against retaliation and victimisation, typically managed by a Whistleblower Protection Officer. Support should also be provided to the accused as everyone is entitled to the presumption of innocence
- Audit and investigation capability to assess and review reported incidents. Such reviews should be carried out by Internal Audit or independent investigators, with their reports delivered to the CEO and Board
With the current working from home environment, the coffee chats no longer occur. Therefore, JNW encourages Directors and Executives to review, and re-communicate to staff, their whistleblower processes, and build a culture of trust and respect. It might just save you money, time and your reputation.
If you require framework assistance, compliance reviews or a discreet audit of a whistleblower report, we have a strong background and proven experience in the design and implementation of policies, controls and governance structures. Feel free to contact Jeff Webb on 0437 539 015 or firstname.lastname@example.org