Concerns on the New UK Whistleblower Rules

by NAVEX Global

This blog post is a preview of our latest white paper, "Are Concerns About the U.K.’s New Whistleblower Rules Misplaced?" Download the full white paper to get all of our insights, as well as more tips on navigating the new UK whistleblower laws.

The U.K.’s Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) recently began rolling out new whistleblower rules, with which financial organisations will be required to comply. These rules have not been universally welcomed, however.

Indeed, according to the FCA’s Policy Statement, feedback from financial industry insiders included several concerns over the new whistleblowing rules. Here, we share our thoughts on three of the key concerns and, based on our experience working with thousands of companies around the globe, offer guidance for whistleblower hotline success. To read the rest of our commentary—including our take on whether the requirements for reports to the board were too vague; create less board visibility on issues get a full analysis, please see our our white paper.

Concern #1: Additional Burden on Business 

Our Take: Hotlines are a Critical “Safety Valve”

Some financial firms feel that the new whistleblower rules are just another bureaucratic requirement that, along with other U.K. and European regulatory requirements, is a hindrance to doing business efficiently. Given that firms already offer other ways to raise concerns, they believe the requirement to establish a whistleblower hotline and have a “whistleblower’s champion” is unnecessary and overly prescriptive.

The vast majority of employee concerns and allegations of wrongdoing will, indeed, be raised through channels other than a hotline. Data from our most recent whistleblowing hotline benchmark report, based on hotline reports from more than 2,300 organisations representing 34 million employees indicate that in 2015, the median number of issues raised through hotlines was 1.3 per 100 employees.

While this number may seem low, it indicates that some employees—even with other reporting channels available to them—are uncomfortable using standard reporting options. Whistleblower hotlines thus represent a crucial outlet for those individuals who have knowledge of potential violations but are wary of speaking to their manager, HR, or others.

Organisations that want to prevent violations of law and policy and that recognise the commercial value of their reputations strive to create a “speak up” culture in which raising concerns is encouraged. Offering a hotline is essential to ensuring that all employees—including those who fear retribution—have an outlet to alert the organisation to issues that could result in investigations, lawsuits, reputational damage and loss of high-value talent. If the organisation doesn’t know about wrongdoing, it can’t correct it before it becomes a fiasco.

Tips for Success:

  • Offer both toll-free telephone and website options so that employees can raise issues at any time, in a method that is convenient for them.

  • Publicise the hotline and website—frequently and in a variety of forms. Make it easy for employees to speak up when the need arises.

  • Educate your employees about how the process works once they use the hotline. If they don’t know what will happen next, they may be reluctant to speak up.

  • Forbid reprisals against those who speak up in good faith—and then punish those who do retaliate. Failure to protect whistleblowers indicates that the organisation is not, in fact, serious about wanting employees to speak up.

WhitePaperCover_AreConcernsAboutUKWhistleblowerRulesMisplacedConcern #2: Anonymous Reporting Encourages False Accusations

Our Take: Value of Anonymity Outweighs the Risk of Misuse

Some managers and leaders worry that allowing employees to raise concerns anonymously will provide an avenue for false, malicious or vexatious frivolous allegations.

While it is undeniable that some employees may see the whistleblower hotline as an opportunity to lie about co-worker or manager behaviour, the reality is that very few do.

Far more typical are employees who do not have all the facts, misunderstand what has happened, or raise issues based on secondhand information. For additional insights on anonymous reporting, download the full white paper

Tips for Success:

  • Allow employees to report anonymously. At the same time, educate them on the value of providing their name (which allows the organisation to more thoroughly investigate the concern).

  • Use call-back codes or special user IDs to allow anonymous reporters to call back or re-enter the system to get questions or follow-up messages from investigators—and encourage them to check back in.

  • Train investigators to view each allegation neutrally and not to assume that it is true (or false). False accusations will be revealed through a lack of evidence.

Concern #3: Lack of Board Insight

Our Take: Boards Don’t Meed a Government Mandate to Take Whistleblowing Seriously

The regulations require a single individual to be responsible for the whistleblowers’ champion role—unlike other UK policy codes (including the U.K.’s Corporate Governance Code), which place ultimate responsibility at the board level. Some commentators argue that this creates a risk that boards and senior managers may pay less attention to the issues that arise.

Boards that care about shareholder value, company reputation and integrity will exercise oversight over whistleblowing even without the mandate in the new whistleblowing rules. They will ensure that the “whistleblower’s champion” has sufficient authority and resources to be effective. Boards that embrace making money by violating the law and cheating, conversely, are unlikely to be moved by a mandate to oversee whistleblowing, and instead likely will pay only lip service to it.

Also, the Corporate Governance Code puts the onus of oversight on boards and nothing in the new whistleblower rules prevents boards from exercising such oversight.

Tips for Success:

  • Help boards understand the value of encouraging employees to speak up and how a strong culture of integrity enhances the corporate reputation/brand, helps attract and retain the best talent, and, as an increasing number of studies has shown, often results in superior financial performance and company valuations.

  • Equip boards with a list of questions they should be asking the Chief Ethics and Compliance Officer (or equivalent role) to ensure the organisation is aware of and mitigating legal and reputational risks. Among these will be questions about the effectiveness of the whistleblower’s champion and the hotline mechanisms.

View original article at Ethics & Compliance MattersTM

Written by:

NAVEX Global

NAVEX Global on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.