Whistleblowing: What should Boards be aware of?

The spotlight on Facebook, following revelations by Frances Haugen, a former employee, again brings whistleblowing and the potential harm to companies and brands from such revelations, to the fore. Mercia’s Group Compliance Director, Rosie Bhattacharjee examines what Boards should be wary of.

It’s an extreme example and, in an ideal world, any company would wish to know about, and to deal with, concerns that employees wish to raise, long before anything hits the press.

So, what can and should Board members expect from their executive director colleagues in terms of the mechanisms by which company employees can raise concerns in a positive and supportive environment?

The Public Interest Disclosure Act was put in place to encourage employees, primarily in public service organisations, to come forward if they believe wrong doing has occurred or may occur in the workplace.  The purpose of the legislation is to protect the whistleblower from reprisal if he or she raise specific types of wrong doing, including danger to life or health and safety, or to the environment. The Act distinguishes between true concerns and potentially malicious referrals or grievances that should be dealt with through normal company procedures.

But, in truth, whistleblowing has grown into a wider definition of exposing wrong doing and, whatever the motivation, the pain of publicity is clear.

Reports undertaken into whistleblowing in banking institutions have identified a couple of themes. Whistleblowing concerns are often raised by more junior staff than their senior colleagues – a fresh pair of eyes perhaps spotting something?  Or that employees who have been in the job a while, “accept” how things are even if they know there are issues?  The progression of a referral starts with the line manager, then to senior manager or compliance, with referral to external bodies being the last resort, having tried on several previous occasions to raise concerns internally.

What should you, as a Board member, consider in relation to this topic?

  • Is there an open culture where employees can raise concerns? How is this evidenced?
  • Have there been any concerns raised by employees that have been drawn to the attention of the Board – and what happened?
  • Does the company have a policy or give any training – do you think it needs to do so?
  • Are there potential areas of concern in the processes the company undertakes and has it considered a mechanism for raising concerns, for example, Health and Safety?

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