Forewarned is forearmed? So why don’t more businesses encourage whistleblowers?

Forewarned is forearmed? So why don’t more businesses encourage whistleblowers?

Whistleblowing hotlines come highly recommended.  The Ministry of Justice includes whistleblowing or speak-up lines as a key bribery prevention procedure in its guidance on the Bribery Act. Under the Combined Code on Corporate Governance, companies listed in the UK are obliged to have whistleblowing arrangements or explain why not. In the US, listed companies are required to have such procedures under Sarbanes Oxley. In the financial services sector, the Financial Conduct Authority (FCA) has its own Whistleblowing Desk, but actively encourages firms to set up appropriate internal procedures as a first step.

Yet although more than 90 per cent of large companies adopt formal whistleblowing policies over half[1] of firms don’t train the staff who are designated to receive concerns. And research by the Institute of Business Ethics[2] revealed that while one in four employees was aware of misconduct at work, more than half chose to stay silent. This would chime with the results of the Eversheds’ survey into whistleblowing, which found that 43 per cent of whistleblowing lines are unused.

A quick glance at the media will probably explain why. Bradley Manning and Edward Snowden are at the high profile and extreme end of the spectrum, facing 35 years and exile respectively. But closer to home the media coverage highlights repercussions such as job losses, incarceration, victimisation, media harassment and even death threats. Little wonder then that despite encouragement from government and regulators, there is considerable reticence to speak up even if a process is in place and it can be seen as the right thing to do. This is borne out by a recent YouGov survey for Public Concern at Work which showed that 22 per cent of employees would not raise a concern through fear of a reprisal.

It could be argued that a whistleblowing line should only ever be a backstop. Good organisations support and encourage an open door culture where employees feel relaxed and able to raise concerns long before they become potential whistleblowing issues.

In our GoodCorporation assessments, we see that the best organisations combine a strong commitment to an open door culture together with actively promoting a whistle blowing line. These organisations ensure that the line is promoted to both internal and external stakeholders and ensure that the line is promoted prominently on their main websites and in locations where employees will actually notice them. They also have the courage to report on the number of calls taken and give basic information about the nature of the calls. The best organisations also measure the use of these lines and a one percent usage up rate (i.e. the number of calls the line would be equal to one percent of all employees) is seen as a minimum benchmark of effectiveness in a number of large organisations.

There are a number of steps that organisations can take to make a whistleblowing line work in practice. We will be debating these at the House of Lords on February 6 when Cathy James from Public Concern at Work will be leading or discussion on ‘What makes whistleblowing work’. We are being joined by some of the UK’s top companies and look forward to what companies have to say.

Full details to follow in a future Goodblog.

[1] Public Concern at Work survey 2013 (164 companies + 500 employees)

[2] Speak Up Procedures (2007) IBE