The Barclays whistleblower scandal will be a real test for the Financial Conduct Authority and the Prudential Regulation Authority, whose rules on whistleblowing clearly state that a whistleblower’s confidentiality must be protected and that firms need to create a culture that encourages employees to raise concerns about poor behaviour.
It is hard to see how an organisation whose CEO instructs his internal security team to identify the author of a whistleblowing letter has created an open culture whereby employees feel confident to speak out. With all that has been said about reforming behaviour in the banking sector, it seems clear that this is still a work in progress.
Whistleblowing is an essential component of good corporate governance which needs to be embraced at the top of an organisation. An effective board will ensure that the right culture is in place, paying particular heed to employee confidence in raising concerns and to monitoring the ways in which they are dealt with. Avoiding any form or repercussion or detriment is essential.
Employees are the eyes and ears of an organisation and are likely to spot misconduct as soon as it starts. A good business recognises that it is in the organisation’s best interests to hear of any issues long before they become a whistleblowing case, so creates an open environment where it is normal to challenge and raise concerns.
Whistleblowing is a real challenge for businesses. In the organisations where GoodCorporation has assessed whistleblowing arrangements, we found that 37% (24 out of the 65 companies assessed) had either wholly inadequate or partially inadequate whistleblowing systems. The key reason for judging the systems as inadequate related to two key factors: poor communications about the system and lack of confidence people felt in using the system. This high rate of inadequate procedures shows clearly that this should be a focus for regulators and business alike.
Posted April 2017
Earlier this month the Department of Justice (DOJ) issued a memorandum from the Deputy Attorney General announcing the Department’s intention to pursue aggressively any individuals involved in corporate crimes. According to the memorandum, the DOJ believes that seeking to hold…