What companies need to know about whistleblowing?

Whistleblowing policies are an important aspect of any transparent working environment. Responsible managers want to be informed about ethical issues; but as they can’t be everywhere all the time, they need their employees to be their eyes and ears.

If whistleblowers speak up, problems can be stopped before they escalate, and damage to staff morale and the company’s reputation can be avoided. Whistleblowing is a necessary and valuable safety valve. Whistleblowers who speak up for the public or their companies’ interests should be thanked.

Eliminate misconceptions about whistleblowing

Whistleblowers can be perceived as troublemakers who speak up for selfish reasons, for instance, because they have been involved in wrongdoing and are seeking immunity or want to reduce their punishment. Celebrity whistleblowers have unfortunately skewed views and affected opinions of all whistleblowers – see Julian Assange of WikiLeaks.

The US Security Exchange Commission’s scheme of financial rewards for whistleblowers has also hurt the perception of whistleblowers because it gives the impression that whistleblowers speak up in their interests.

However, whistleblowing in companies tends to be more mundane and day-to-day, not newsworthy, and we never know who the whistleblowers are, so it’s an unfair comparison.

Whistleblowers in companies are more likely to be showing their loyalty than disloyalty. They risk speaking up even though they have nothing to gain.

“Employees who are considering blowing the whistle won’t want to ask for the policy at that point because that would give the game away, so the policy needs to be in place for when it is needed.”

Internal and external whistleblowing

It’s understandable that companies want to encourage internal reporting rather than external reporting, and that’s another reason to put an internal policy in place, to make internal reporting a real choice. No company wants their dirty laundry aired in public. However, a policy should not be misleading, for example, claiming that external reporting is prohibited if this is untrue. In some instances, there is a duty to blow the whistle to a professional body or regulator.

Challenges that companies should watch out for

Whistleblowers can make genuine mistakes. They can also exaggerate. Although it’s hopefully rare for whistleblowers to tell outright lies, anything is possible.

Whistleblowers may hold a grudge against their company or their manager. The last day in a job is a common day to blow the whistle. If a whistleblower is very determined to see others get in trouble this can be a warning sign that they have lost their objectivity, although what they are saying may still be true.

Companies need to protect the rights of the person accused by the whistleblower. Companies should conduct an independent investigation to seek corroboration and evidence. Whistleblowers aren’t witnesses. Whistleblowers only provide the initial alert or tip-off, and it’s up to the company to take it from there.

Even if a company keeps a whistleblower’s identity confidential, their identity may be guessed. To minimize this risk, the accused person should not be told that there has been a whistle blown about them. Delaying an investigation can be prudent in some circumstances, for example, if a delay would protect the whistleblower’s identity.

Deal with whistleblowers and protect them from repercussions

Whistleblowers need options as to how they report. They may not want to use their email account. Some prefer a face-to-face meeting with the Whistleblowing Officer, although some form of written record needs to be kept for everybody’s protection.

In the UK, for instance, banks are required to allocate the role of Whistleblowers’ Champion to a non-executive director on the board. Champions aren’t automatically told who whistleblowers are or what they have reported, but champions can be contacted by whistleblowers if they feel that they are being bullied or victimized.

The UK National Health Service also has a special scheme for whistleblowers who say they have lost their jobs and are struggling to get a new job because of blowing the whistle.

Senior management and HR best support whistleblowing policies, and whistleblowers themselves

Senior managers and HR Leaders must ensure that appropriate frameworks and policies are put in place. Although HR directors should not receive whistleblowing, they do have two important roles to play.

First, they must make sure that all employees, including new employees, are aware of the policy. If third parties such as suppliers or contractors can blow the whistle, then they also need to be made aware of the policy. Second, HR directors must understand the distinction between a grievance for HR to handle and whistleblowing. The right definitions of whistleblowing and whistleblower must be used in the policy.

Senior management (the board) can ask how many whistles blows there have been, although not who the whistleblowers are or what the whistle blows were about. It can be difficult to know what the bare number means. Does a low number mean the company is perfect or does a high number mean the policy is working? However, it should be possible to assess trends over time, or perhaps trends within the industry and market.

Tasos Tsoumanis, Executive Director, HR.