Whistleblowing in the boardroom – Part 3

A need for change in attitudes towards whistleblowers

Despite improvements in some areas of the whistleblower framework, there are, unfortunately, still significant shortfalls in the organisational treatment of whistleblowers. A recent study titled Whistling While They Work 2 by Griffith University surveyed 17,778 individuals who were reporters, managers, executives and governance professionals. It revealed that whistleblowers are still treated badly by their management or colleagues (principally management) in 42.1 per cent of cases according to reporters and 34.1 per cent according to managers and governance professionals who dealt with cases.

What is concerning is that these results compared to the results of the survey’s predecessor, Whistling While They Work, “public sector whistleblowers were mistreated in almost exactly the same proportions”.

A key deterrent of whistleblowing has been how actions will be received by co-workers and managers after reporting the illegal activity. Disappointingly, according to the research, whistleblowers experienced negative repercussions in an average 81.6 per cent of cases, according to reporters (and 66.3 per cent according to managers and governance professionals who dealt with cases), including 56 per cent according to reporters and 34 per cent according to managers who experienced harassment and/or direct adverse employment impacts.

We believe more needs to be done in this space. Creating a culture where people are afraid to speak up inevitably leads to scandal. We see all too often that when employees feel a lack of trust in the reporting procedures, this leads to a culture of underreporting. It is this company mindset that allows for the decades of malpractice that we eventually see come out of the woodwork just as we are seeing with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. Companies need to be comfortable that there will be mistakes that happen in the business and look to take the opportunity to learn from them and implement changes, so it doesn’t happen again.

Building a safer environment for whistleblowers

There are several steps that can be taken to build the trust necessary for employees to feel safe enough to have the confidence that they can report without feeling persecuted.

Organisations that are developing an effective reporting framework, must first establish a supportive culture around employees reporting any suspicions of unlawful behaviour. The first step any business must take is to establish a clear set of policies and procedures for employees to undertake when they feel they need to report an incident. The use of signage and banners to promote the policies and procedures regarding whistleblowing is a great way to educate staff about the availability of the service as well as to encourage the reporting of any suspicious behaviour. In large organisations, PKF has also seen intranet advertising, regular communication from senior management and delivered by those leaders via email, at toolbox sessions, on induction days, etc.

Which type of companies require a whistleblower hotline?

At PKF Integrity, we have implemented hotlines and dealt with whistleblowers across a range of industries. Integrity is an issue for all companies, so any business would be wise to implement a hotline. It is common for businesses to think that it wouldn’t happen in their business, but the reality is that fraud is happening to them and it can happen anywhere. The risk of not having a hotline is too high, both financially and culturally.

Such a solution seems simple in theory and yet companies are still grappling with the whistleblower and how to handle them effectively. One hopes improvement continues to occur because it is the best opportunity companies have in uncovering wrongdoing.