25.04.13

Developing a Whistle Blowing Culture

On August 7th, 2012, the Protected Disclosures Act, 2011 ("the Act") came into operation. The Act is aimed at creating an atmosphere in which organisations are aware of the importance of implementing polices relating to disclosures of improper conduct. Given the link between the protected disclosures framework created by the Act and good corporate governance, it is important for organizations and individuals alike to understand the parameters of this framework.

Under the Protected Disclosures (Designated Authority) Order, 2012 the Commission for the Prevention of Corruption (the "Commission") was designated the authority with responsibility for monitoring compliance with the Act.
The stated objects of the Act, aptly known as the "Whistleblower law", are to:

1. facilitate and encourage the making, in a responsible manner, of disclosures of improper conduct, in the public interest;

2. regulate the receiving, investigating, or otherwise dealing with disclosures of improper conduct; and

3. protect employees who make specified disclosures from being subjected to occupational detriment.

Organisations should therefore take steps to create a culture that will enable the stated objectives of the Act to be achieved.

First and foremost, employees, volunteers and contract workers should feel empowered to disclose information on the conduct of their employer or fellow employee when they have a reasonable belief that the information disclosed indicates that improper conduct has occurred, is occurring or is likely to occur. It is important that workers are confident that they will not encounter hostility and alienation as a result of their disclosures. Organisations should therefore establish comprehensive whistle blowing policies and programmes (collectively the "Programme") containing clear mechanisms and which outline the methodology that should be utilized to receive, investigate and deal with these disclosures in accordance with the provisions of the Act.

Although the scope of an organisation's Programme will depend on, among other things, its size and the relevant industry, there are nevertheless some common or standard terms. For example, the Act stipulates that the person who receives the disclosure must receive and record the matter being disclosed. It has been suggested that as a best practice an organisation's Programme should provide a formal mechanism for receiving and recording these disclosures in a systematic manner. This may be achieved, for example, by establishing a hotline or drop box to receive such reports. The form and content of these reports should also be established.

Further, the Act indicates that once the person receiving the disclosure deems that an investigation should be initiated based on the contents of a report, the investigation should commence promptly and periodic updates at intervals of thirty days should be provided to the staff member who made the disclosure. For this reason, it is recommended that an organisation's Programme should detail the manner in which the investigation into the disclosure will be carried out and the circumstances in which an investigation can be refused or terminated. One such circumstance may be, for example, where the investigators conclude that the subject matter of the disclosure is frivolous or not sufficiently important to warrant investigation.

These and other mechanisms which establish effective internal communication channels provide the framework for an effective Programme, but the Programme's success will depend largely also on its communication to workers, shareholders and other stakeholders. In this regard, organisations could consider instituting a comprehensive educational training programme which emphasizes to employees that these disclosures form an integral part of the values and business standards of the organisation. This educational training aspect of the Programme may be coupled with periodic employee surveys to assess employees' attitudes towards whistle blowing.

This periodic assessment of employees' attitudes will aid management in determining the success of its Programme. In addition to ongoing assessment of the Programme, management should show the organisation's strong commitment to whistle blowing by advocating same both internally and externally.

In formulating its Programme, organisations will need to note that the Act provides that the Commission should inter alia publish procedural guidelines regarding the making, receiving and investigation of these disclosures and review the implementation and operation of such procedures. Therefore, these guidelines will have to be incorporated into and inform the organisation's Programme.

Developing a culture within organisations where whistle blowing is the norm is also reliant on the implementation of efficient internal organizational mechanisms that facilitate timely response and action. In addition, the development of a whistle blower culture will involve, to some extent, a transformation in the societal ethos. Indeed, the Act tasks the Commission with planning, implementing and monitoring public awareness programmes aimed at informing and educating employees, employers, and the general public about the making of disclosures and the procedures for receiving and investigating same. It is hoped that these public awareness programmes, in addition to an internal educational training programme, will positively impact societal attitudes towards whistle blowing.

In 2002, Time magazine named a tripod of women as "Time's Persons of the Year" and changed the face of whistle blowing. These women shared the commonality of being whistle blowers from various organisations spanning Enron, the Federal Bureau of Investigations and WorldCom. It has been over a decade and there has been a global proliferation of whistle blowing legislation and it is hoped that the development of a whistle blowing culture within organisations will follow.