Those working in highly regulated sectors are already aware of the risk of litigation if an employee blows the whistle. However, international statistics show that most whistleblowers choose to report misconduct internally before approaching a regulator. So, senior managers’ decisions about how to handle such complaints can make the difference between an issue that can be handled internally and one that leads to formal investigation.
Many big enterprises on this Continent have written and adopted whistleblower policies. They have set up helplines or other channels as safe vectors for employee complaint. I’m not sure these are any better than the traditional Complaints Box which, when opened, usually revealed crude notes and sweetie papers. But the intention is correct, as is the writing into HR policies the rights of employees to declare corporate misconduct.
But that’s only a part solution. What should you do when a real live whistle is blown? What drills should you put in place, and which responsibilities need to be defined before this happens? I’ve taken the time to research best practice. So, here are 5 sensible steps to consider:
As in an A&E Department, the first step is to assess the nature and severity of the complaint. Potential impact will depend on the financial, legal, and reputational risk to the Company; and the credibility of the complaint.
2. Decide who will investigate
Once potential impact has been assessed, determine whether it should be investigated by the Company or by an external resource. Is there a need for independence? If senior management are implicated in the complaint, the Company should generally engage outside counsel to avoid the appearance of a conflict of interest.
3. Respond to the whistleblower
The overriding goal for your first communication is to reassure the whistleblower they can trust the Company to handle the matter properly. Encourage the whistleblower to provide detailed information; ask questions for clarification; and try to remove emotion from the equation.
4. Inform colleagues
Deciding whom internally to inform is fraught with difficulty. Certain employees may need to know, to ensure the Company fulfills its legal obligations. But wider disclosure could compromise the investigation. Remember Companies also have an obligation to ensure no form of reprisal is taken against whistleblowers. .
5. Inform third parties
This is often overlooked in the panic to keep things ‘under wraps’. But timely reporting to relevant third parties might avoid negative consequences in the future. For example, allegations of misconduct that could have a material impact on financial statements should be disclosed to the Company’s auditor.
So, in summary, It’s not enough to have a policy. Your team must know what to do when that whistle does indeed blow.
Chris Harrison leads The Brand Inside