Compliance practices for encouraging whistleblowers

Whistleblowers are people who speak up to expose information or activities indicating wrongdoing by individuals, departments, or organizations. They may reveal this information internally, such as to a supervisor or to a designated business unit or hotline. They may also reveal it externally, such as to regulators, supervisors, or the media. Corporate cultures should enable employees to have the courage and compulsion to act as whistleblowers in situations where it may be necessitated.

  • Set clear expectations for conduct: The most ethical corporate culture is one that has clear values and norms which can be expressed and reinforced at all levels. A culture in which expectations about employee and organizational integrity are expressed openly and referred to in justifying business decisions is a culture where employees will also be comfortable challenging behavior and choices which appears to fall outside of those expectations. An organization’s culture should be openly intolerant to unethical behavior and explicit about the right processes and practices. This way, deviations can be easy to see for participants and ethical blindness or responsibility shifting can be replaced with compliance awareness and individual accountability. People will have the confidence to speak up about wrongdoing if they are certain that they know and believe in what the right action should be.
  • Model speaking out from the top: The tone at the top is an important driver of whistleblowing. Employees should see that leadership also speaks up boldly against wrongdoing and admits to shortcomings or omissions. Senior management and/or supervisory board members should be visibly engaged in seeking to prevent, identify, and correct inappropriate conduct and practices. If employees see that those at the top of the organization are reinforcing the cultural principle of exposing problems, then they will respect the necessity of this role and be empowered to take it seriously.
  • Facilitate ease of access to reporting: A major reason why employees do not take action is because they do not know how. All employees should be provided with information about whistleblowing procedures and given the opportunity to ask questions and check understanding, including discussing dilemmas, about when whistleblowing would be appropriate or applicable. It is also imperative that the mechanism for the whistleblowing, once the employee endeavors to do so, is accessible and publicized. If there is a hotline, a dedicated mailbox, or a specific person to reach out to, then employees should be able to find and follow the procedure without being discouraged by undue difficulty of the process.
  • Provide active feedback: People will not act as whistleblowers if they believe nothing will come of their reporting. Organizations must actively recognize people who come forward and keep them as informed as possible of steps that are being taken. Employees must know that if they step up to report an issue, they will be listened to meaningfully and that the appropriate people will take action. Constructively listening to the person who is whistleblowing is the first necessary step. Then, the employee should be kept informed of what will follow and, once any investigations are complete, the outcome. This way the employee knows that taking on the responsibility and risk of stepping forward will be attended to with the appropriate seriousness.
  • Control against retaliation: Most importantly, whistleblowers should be protected and shielded from recrimination. While false claims or dubious motivations need to be discouraged, genuine whistleblowers who wish to reveal and stop harmful business practices should not be punished. In order to enable people to come forward as whistleblowers, organizations must adequately reassure employees that they will not face termination, demotion, harassment, or other mistreatment in response. Corporate cultures must forbid professional retaliation in any form in order to create an environment where an employee with evidence of unethical or fraudulent business practices could step out as a whistleblower.

The role of the whistleblower is extremely important in raising the legal, ethical, and compliance standards of organizations. Having a corporate culture in which this reaction to wrongdoing is promoted is, in and of itself, crucial for developing a controls framework which prevents and addresses misconduct effectively.

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