We only need to pick up a newspaper to realise how central whistleblowing is to the public interest. And, as changes are forthcoming, staying ahead is crucial to business and HR success.
A robust compliance programme is built on a foundation of comprehensive policies which enable risk, compliance and HR leaders to identify risk areas and make data-driven decisions. A fundamental aspect of this is a whistleblowing programme that encourages and enables employees to bring forth inquiries and allegations related to business compliance and ethics.
Whistleblowing and compliance:
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Public attention to how businesses do business is at an all-time high. The modern workforce actively seeks out employers based on corporate culture, work/life balance and reputation. A strong whistleblowing programme – one that is actively encouraged for use – is one element that demonstrates a commitment to the workforce.
No matter your business size or type, there is a strong need for inquiries and reports of wrongdoing. For example, the 2023 Navex Hotline & Incident Management Benchmark Report demonstrates the following regarding substantiation rates of reports: misuse or misappropriation of assets is substantiated at 67%, imminent threat to a person or property at 75%, health and safety at 65%.
Those categories are some of the most highly substantiated claims and all have profound effects on workplace culture.
When a programme works in practice, whistleblower reports are followed up on in earnest and identified issues are remediated. This shows a commitment to the workforce, improves workplace safety, and ultimately protects the organisation from legal liability, and reputational and financial damage.
In fact, organisations with mature whistleblowing programmes see fewer material lawsuits and 9.5% greater earnings compared with the S&P index.
Legal and revenue benefits aside, a company with a strong compliance and whistleblowing programme feels the cultural benefits.
Organisations that prioritise compliance are actively preventing wrongdoing from taking place – improving culture and increasing compliance with relevant legislation.
A critical part of this is making sure speak-up cultures are encouraged. Empowering people, and providing them with the right tools, such as reporting hotlines, helps prevent workplace misconduct, and ensures proper incident management without the risk of retaliation.
Businesses must be regulation-aware in this complex environment
The growing complexity of global whistleblowing policies can be difficult for businesses to navigate. This landscape means proper risk and compliance policies are essential, including a strong whistleblowing programme.
Since Brexit, EU regulations no longer apply to the UK. However, the EU Whistleblowing Directive is a wide-reaching piece of legislation, and UK business leaders should still ensure they understand.
This is particularly important for any business with operations within the EU, as they are subject to the Directive. Beyond this, the UK is developing its own whistleblowing laws to replace the outdated Public Interest Disclosure Act of 1998.
“For a long time, experts have pushed for new legislation to replace the outmoded Public Interest Disclosure Act 1998 – which was conceived to protect intellectual property, but has effectively enabled NDAs to proliferate, leaving businesses and employees open to the vagaries of decisions made in the courts.
A new Whistleblowing Bill would bring things up to date. It has had two readings in Parliament, and has cross party support. What is proposed is a Government Office of the Whilstleblower to help individuals and businesses navigate this area, and provide structure and support to all,” says Georgina Halford-Hall, CEO at Whistleblowers UK.
These updated whistleblower protection bills are being put forth in Parliament and will likely mirror many of the EU Whistleblowing Directive’s traits in an effort to protect trade.
The first Whistleblowing Awareness Week, proposed Protection of Whistleblowing Bill, and the creation of the Office of the Whistleblower are all efforts from the UK to align with global whistleblowing protection legislation. So, being aware of the EU Directive and other legislation across the globe is advantageous for UK business leaders.
Best practices to stay ahead of whistleblowing legislative changes
With the growing global uncertainty, internal and external whistleblowing trends and legislation will undoubtedly change. Business leaders must keep on top of any adjustments to regulations so they can adapt their risk and compliance policies accordingly.
Perhaps the best way employers can ensure internal whistleblowing reports and resolutions are properly handled is to encourage employees to speak up without the fear of reprisals.
Organisations that embrace a speak up culture ultimately strengthen the business and create a more positive workplace environment. Another important note for organisations is the importance of providing equal weight to both named and anonymous reports, as anonymous reports account for 56% of all reports according to 2022 Navex hotline data.
Leaders in HR know the negative cultural effects of retaliation probably more than any other business unit. Retaliation is the enemy of a speak-up culture, and while the frequency of retaliation reports is at 0.96% of all reports in 2022, this is an increase from the previous year and should be monitored closely.
Organisations should set clear policies to address reports of retaliation and follow through consistently if retaliation is discovered. Doing so further instills trust by demonstrating the programme actually works.
Deploying an effective whistleblowing strategy also helps businesses mitigate workplace risks. For example, with the right technology and tools in place, HR departments can work collaboratively with risk and compliance leaders – reducing silos and more efficiently resolving issues.
Finally, benchmarking your whistleblowing programme against others is an invaluable tool to evaluate how well it works in practice. There are myriad variables affecting whistleblowing trends, and taking a close look will identify areas where your organisation is aligned with peers, and where it diverges.
Those who come forward with reports of wrongdoing are doing a service to your organisation. It is up to leaders within the company to establish a culture that prioritises ethical behaviour and compliance with internal policies and legal requirements.
Jan Stappers is EU Whistleblowing Expert at Navex