How to Get From Whistleblower Protection to Accountability

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[author: Matt Kelly, Radical Compliance]

Corporate compliance can be a noisy and confusing world, with many different issues demanding a compliance officer’s attention. One message, however, has always been a keynote cutting through all the cacophony -- the importance of whistleblowers and developing a corporate culture that supports them.

Compliance officers hear that message all the time. In the lofty sense, we hear it from regulators who speak about compliance and inevitably mention the crucial support for whistleblowers. In the practical sense, we hear it from the parade of enforcement actions that cite whistleblowers (or the retaliation against them) as a vital part of the case.

The the mechanics of implementing a whistleblower hotline or adopting an anti-retaliation policy are straightforward. The bigger challenge for compliance officers is building a corporate culture that supports the full use of those things.

We also see the importance of whistleblower protection in the form of whistleblower protection laws that have proliferated worldwide. The latest example being the EU Whistleblower Directive, going into effect across the EU by the end of this year.

So in advance of World Whistleblower Day on June 23, let’s explore how it all fits together: Whistleblower protection laws, the mechanics of whistleblower protections, and what a speak-up culture is ultimately trying to achieve.

Start With the Strong Regulatory Imperative

That’s easy enough to demonstrate. In one jurisdiction after another, and one field after another, we’ve seen regulators place more and more emphasis on whistleblowers.

The EU Whistleblower Directive is only one example of that. In the United States, the Anti-Money Laundering Act and the Criminal Antitrust Anti-Retaliation Act both went into effect in 2020; the Securities and Exchange Commission’s whistleblower award program also reported its busiest year ever 2020. In 2001, only four countries had whistleblower protection laws: The United States, Britain, Israel, and New Zealand. Today, virtually every major economy in the world has at least one law protecting whistleblowers, if not more.

Slowly but surely, whistleblower protection has become a legal norm worldwide over the last decade or so – a fact that every business needs to not only be aware of but embrace.

Or else what? Or else the rest of the world moves forward without you. For example, suppose a would-be whistleblower is too afraid to report internally and brings their concerns to regulators instead. In that case, your company not only lacks the trust of the whistleblower – essential to a robust speak-up culture) – but can lose valuable credit with regulators. This is especially important during settlement talks because they will be the ones approaching you, rather than vice-versa.

Just as bad, the would-be whistleblower might blast their concerns (and evidence) across social media. Then your company is in a position where it needs to explain itself to all its stakeholders, from employees to business partners, to regulators, to the public. And you still find yourself without that potential for self-disclosure credit that comes with internal reporting.

In short, the changing regulatory landscape is driving the need for a speak-up culture.

Remember the Goal: Accountability

Whistleblower protection is only one part of a much larger goal that compliance programs are trying to achieve. They are trying to ensure accountability, where allegations of misconduct are investigated and perpetrators undergo appropriate consequences for the wrongdoing committed.

That’s what regulators (and other stakeholders) want to see from corporations; it’s what makes people look at a company and say, “Yes, it’s doing the right thing.”

Whistleblower protection is only one component of your internal reporting program. Likewise, your internal reporting program feeds into a more extensive system of policies and procedures — otherwise known as an ethics and compliance program — to make accountability stick.

Honestly, the mechanics of implementing a whistleblower hotline or adopting an anti-retaliation policy are straightforward. The bigger challenge for compliance officers is building a corporate culture that supports the full use of those things. It’s more about training for managers, commitment from executives, and communicating clear examples of conduct, both good and bad, so employees know what is expected of them and see those expectations enforced.

If you can build that culture of accountability, then the scenarios mentioned earlier about would-be whistleblowers taking their concerns elsewhere become much less of a threat.

The Onus Falls on Leadership To Listen

This is arguably the most challenging part of cultivating a speak-up culture. The people receiving those concerns and reports need to listen. A speak-up culture of accountability is only as strong as its listen-up counterpart.

After all, most employees want to speak up about wrongdoing they see at their organizations because they want and expect their organizations to do the right thing; that’s excellent raw material for ethics and compliance programs. But, unfortunately, far too many employees don’t speak up out of fear of retaliation or think that nothing will be done to address the problem.

Those are problems of leadership and accountability. So, compliance programs need to invest ample resources in the training of managers on how to receive and investigate complaints – in other words, training on how to listen.

Senior executives can’t be excused from this task either. The majority of their time might be spent thinking about strategic options and communicating priorities and plans to others. But a culture of accountability also depends on senior leaders being willing to hear and accept unpleasant truths.

It’s not an easy skill to master. However, if a business wants to leverage its compliance program for maximum benefit, listening is just as crucial as the hotline, policies, procedures, and everything else.

A Foundational Commitment to Ethical Principles

The bedrock of a speak-up culture and corporate accountability is a commitment to ethical principles. We can talk all day long about the proper functioning of hotlines, investigations, and internal reporting systems; and implement training for managers until the cows come home.

Ultimately, success depends on a company holding firm to its ethical values – whether that’s by identifying improper conduct or deals (preferably before the agreement is made), taking action against offending managers, or reporting corrupt behavior to regulators. Accountability is about following through on promised consequences, which requires a commitment to ethics from the top down.

That’s the universal principle World Whistleblower Day supports. And if with the elements of an ethics and compliance program the right way, any company can do the same.

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View original article at Risk & Compliance Matters

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