A whistle blowing policy is a policy that allows employees in an organisation to effectively speak up against any misconduct in the organisation without supervisory backlash to them. This may be formally to a specific team or through anonymous channels. The number of whistle blowing cases has increased substantially over the past decade or so resulting in better governance of large corporate and financial institutions globally. In Singapore, under the Prevention of Corruption Act (PCA), there are provisions that safeguard the identity of informers whose information led to the investigation and prosecution of any offences under the Act. Furthermore, all witnesses, including informants, are protected from potential retaliation or intimidation under the provisions of the Penal Code (Chapter 224). The Singapore government doesn’t have an official law that mandates the formation of a whistle blowing policy, but they highly recommend doing so. One needs to adhere to global best practices and not wait for it to turn into a formal law. Whistle blowing generally occurs in cases of:
- Money Laundering
- Bribery & Corruption
- Corporate Fraud
- Harassment & Discrimination
- Regulatory Non-Compliance
- Weak Organisational Structure
- Conflicts of Interests
- Lack of Cyber Security
- Violation of Private Data
- Retaliation from employees
Why should you have an internal whistle blowing policy?
The first and foremost reason for having a whistle blowing policy is the fact that a company should have a moral obligation to allow its employees to have the choice of doing the right thing without any adverse effects on the whistle blower (the individual that files the complaint), therefore allowing the whistle blower to be more confident with their complaint. Furthermore, by having this policy in place, employees in the business act as an extension of the regulatory authorities. Employees are subject to regulatory supervision and may be personally liable for misconduct. Hence, a whistle blowing policy allows them the freedom of stepping out of the corporate hierarchy and made their concerns heard without fear of backlash. Barclays is a good example to look at when evaluating your whistleblowing policy needs. Jes Staley, CEO of Barclays, was investigated for attempting to identify a whistle blower within the bank. The FCA (Financial Conduct Authority), fined him US$870,428 for sending criticizing letters to the employee who he believed was the whistle blower. The action taken by the FCA demonstrates the importance of a comprehensive and effective whistle blowing policy as it provided protection to the whistle blower
Problems associated with this policy
False Complaints/Personal Complications – Misuse of this policy is a common practice in the industry. Many employees make the mistake of involving their emotions when whistle blowing. This leads to complaints being made about things that are very minute or are in fact not even true and have no significant impact on anyone in the organisation. Sometimes, the complaints can also be very subjective in nature. However, no matter how small, the organisation is required to inspect the complaint in order to be compliant, which results in unnecessary bureaucracy and waste of time. Independence of the whistle blowing policy – authority within the organisation before going to the official regulators. In large organisations, there is generally a team that handles all the complaints of the whistle blowers. In small organisations, the complaints generally have to go through the CEO or anyone with an equivalent position. However, what happens if an employee has an issue with the CEO or the whistle blowing team itself? Who should the employee approach then? in order to overcome this problem, there should be a policy held in place that gives employees power to report directly to the regulatory authorities. Possible Reputational Damage – Media exposure, legal testimony and government investigations can affect the reputation of the whistle blower’s company. There is also an option for whistle blowers to be anonymous about their complaint. This can also be a disadvantage to the employee as it can negatively affect their career prospects due to the fact that employers might see them as disloyal for not keeping company’s secrets and industry practices under wraps.
So, should one have a Whistle Blowing Policy?
The obvious answer would be yes. However, it is important to remember that as an organisation, you must provide protection to your whistle blowers and ensure that there is a culture of speaking up in your company. As outlined by Rajah & Tann Asia, four aspects should be included in a whistle blowing policy:
- Procedures to address concerns – To reassure whistle-blowers that instances of wrongdoing will be dealt with appropriately.
- Openness, confidentiality and anonymity – To ensure that whistle-blowers will remain anonymous and no retaliation will be taken against them and in the event the concern turns out to be untrue, the whistle-blower will not be punished if the suspicion was reasonable.
- Commitment and clarity – The organization’s leadership or regulators should make clear that all concerns will be treated seriously.
- Access to independent advice – Potential whistle-blowers may need advice when feeling unsure or unaware how to raise a concern, both internally and externally.
How will Argus (now Waystone Compliance) help?
Argus (now Waystone Compliance) will help draft a robust policy for your company that will ensure all aspects as mentioned above are covered, therefore making sure the effectiveness of your whistle blowing policy. On top of that, we can also make certain the complete implementation of the policy to ensure compliance with the regulatory authorities, therefore acting as your designated outsourced whistle blowing team.