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Best Practices Whistleblowing

How Can Whistleblowing or Incident Reporting Help Improve Employee Compliance?

It goes without saying: fraud, corruption and misconduct have no place in any organization. Detecting these behaviors and malpractices can often be incredibly challenging for HR and Compliance teams, so businesses must rely on the morality of other employees to escalate and self-report.  

The problem is, people can be apprehensive about whistleblowing and the stigma attached to it, which can be deeply ingrained. After all, children learn early on that ‘telling tales’ has consequences, perhaps (temporarily) throwing friendships off balance or earning the ‘whistleblower’ the reputation of being a ‘snitch’. 

Whistleblowing in the workplace can have serious repercussions, so potential whistleblowers often have legitimate concerns about taking action. For example, they may fear: 

  • Retaliation or that co-workers will treat them differently
  • They won’t be listened to
  • The behavior or conduct isn’t serious enough to be called out and reporting it might do more harm than good
  • Action could be taken against them that may cost them their job or impact their career

Recognizing the risks whistleblowers run, regulators have taken steps to ensure they’re not discouraged from coming forward and are protected.  

The 2019 EU Whistleblowing Directive, for example, requires member states to provide effective channels for whistleblowers working in the public and private sectors to report breaches of EU rules confidentially. It also established a robust legal framework for whistleblower protection. 

Similarly in the UK, organizations must comply with the Public Interest Disclosure Act 1998, and to count as whistleblowing, any wrongdoing disclosed must be in the public interest. This typically excludes personal grievances, such as bullying, harassment and discrimination, but protects employees who report: 

  • Criminal offenses, such as fraud.
  • Danger to someone’s health and safety.
  • Risk of or actual damage to the environment.
  • Miscarriages of justice.
  • Corporate law-breaking, e.g. not having the right insurance.
  • Suspected coverups of wrongdoing.

Although it might seem counterintuitive, it is in the best interests of organizations to encourage whistleblowing and make it easy for employees to report misconduct without fear of retribution. In fact, the US Department of Justice (DOJ) recently implemented its Voluntary Self-Disclosure Policy (VSD Policy) to encourage companies to report their own misconduct, as they may be eligible for smaller penalties.  

Since then, Assistant Attorney General Kenneth Polite Jr. has already reported an increase in the number of disclosures made to them and stated “it is also important to empower Compliance chiefs and to allocate adequate resources to Compliance departments.” And as we saw in the recent case of Ericsson, if firms choose not to work cooperatively with prosecutors, they can pay huge additional fines to the whistleblower as well as the prosecutor. So what do firms need to do to implement whistleblowing policies, procedures and controls? 

How Firms Can Encourage Whistleblowing 

While self-reporting and cooperating can help firms avoid hefty fines, organizations must have the right procedures and protocols that make it easy for employees to raise complaints and ensure that each case is dealt with appropriately. Firms should also have clear mitigation and remediation policies in place if they report any wrongdoing to regulators. Whistleblowing or incident reporting can be used to the organization’s advantage, bringing to light issues of serious misconduct and allowing them to be addressed early on, before they lead to large fines and serious reputational damage. 

Whistleblowing and incident reporting frameworks and systems vary from one organization to the next, but for any system to work effectively, it is vital to have a robust hotline and case management process in place. This will enable the intake and collection of employee concerns, and allow each incident to be managed, investigated, and resolved efficiently. This means ensuring that: 
 

  1. Employees feel supported and have the confidence to report misconduct through reliable channels, anonymously. 
  2. Experts are on hand to classify allegations, prioritize cases needing further action, and execute a route for investigation. 
  3. The investigation is timely, consistent, and leads to non-discriminatory results. 
  4. A solution is reached that does not involve bias or prejudice against the whistleblower. 
  5. Reporting and filing requirements are easy to manage and adhere to global regulatory standards. 
  6. Opportunities for improvement are identified to help create a more streamlined and efficient process for future cases. 

The Key Role of Employee Compliance Technology 

The lines between HR and Compliance regarding employee compliance have become blurred over the years, yet the two departments are typically siloed from each other. This makes implementing an effective whistleblowing framework challenging: without a holistic view of employee compliance activities, businesses may struggle to understand exactly where issues have arisen, who is involved, and what action has been taken to resolve them.  

This is where a comprehensive employee compliance software solution becomes indispensable. Not only will it give HR and Compliance teams full transparency into employee compliance; it will also provide a single portal through which staff can access their company’s employee compliance and ethics training programs, and if needed, flag any issues as a whistleblower. This ensures HR and Compliance can detect where misconduct has occurred, while employees have ready access to the tools they need to understand and comply with policies and procedures and a channel that allows secure, anonymous incident reporting. 

If employees know how to raise concerns, are confident they have access to a safe space and secure system that ensures each case is taken seriously and is thoroughly investigated and resolved without repercussions for the whistleblower, then they are more likely to act. This provides organizations with invaluable intelligence that can be used to catch potential or nascent problems, while creating a business culture that stamps out bad practices and allows good ones to thrive. 

Discover how Star’s Employee Incident and Policy Management solution can bridge the gap between HR and Compliance, and help your company build a culture of compliance.