Whistleblowing is Risk Management!

By Donna Turner

Most articles, blogs and webinars (to name but a few) discussing whistleblowing tend to focus on how it can be an indicator and key component of a ‘strong corporate culture’ and its ‘importance in the fight against injustice’. These are some of the key messages and straplines that have been used for a long time and many firms use similar language when referencing their own policy and approach.

I have personally never come across anyone who has disagreed with that sentiment but the headlines in the press tell a different story, highlighting the negative and harmful behaviours of firms and individuals towards those who have raised their concerns and blown the whistle. The language used is very different and typically references the ‘bravery’, ‘courage’ and ‘sacrifice’ of those who have spoken out. Words that do not correspond with a good corporate culture.

Where is the evidence for this?

Just consider what happened when Katharine Gun, a British intelligence employee leaked an email which requested aid in a secret operation to bug the United Nations offices of six swing nations on the UN Security Council that could determine whether the UN approved the invasion of Iraq. After the email was reproduced in the press, Gun spent a night in police custody, and eight months later was charged with breaking the Official Secrets Act. The case was eventually dropped because the prosecution declined to offer evidence.

Or, Helen Evans, the Oxfam aid worker who exposed systemic sexual exploitation and abuse carried out by some of its aid workers and the institutional cover up that followed. Her revelations were one of the biggest charity scandals in recent years but she also faced a backlash from people who accused her of being self-serving, neglecting to do her job and allowing children to be abused. 

What about within financial services? 

Admittedly, these are incredibly significant and high profile cases but even when looking closer to home within the financial services sector, there is no shortage of negative news. The financial services industry has not been the poster child for setting gold standard corporate culture.

Barclays Chief Executive, Jes Staley tried to discover and reveal the identity of an anonymous whistleblower after members of the Board received letters raising concerns about a senior employee who had been recruited by the bank.

Gulf International Bank’s Head of Internal Audit, Ms Kong, blew the whistle on the illegality of a new investment product that was offered to investors and questioned the legal awareness of the Bank’s Head of Legal.  This criticism led to a complaint, and ultimately her dismissal. The Court of Appeal ruled that a whistleblower raising concerns about serious wrongdoing in a reasonable way, can still be dismissed if the employer subjectively finds the behaviour objectionable and therefore separate from the protected disclosure. 

Would you consider raising a concern knowing your employer is able to dismiss you for the behaviour and breakdown in a relationship that follows whistleblowing, rather than the whistleblowing itself?

We are nowhere near the utopian life of not needing whistleblowing but the corporate culture and values narrative of openness, trust and integrity is not reflecting the experience and reality for many who do speak out. 

So, what needs to change?

What would happen if we all started to consider whistleblowing as a component of a firms’ overall risk management framework, and not a one page policy and phone line buried in the depths of a HR website. Does anyone spend as much time thinking about how the whistleblowing framework should operate as they do for the inputs and correlations of factors supporting market, credit and operational risk models? How would the approach and language change if whistleblowing was present at the business risk management governance forums instead of or as well as the people and culture committees.

Wouldn’t you want to know what was happening in your business and act on it before it hits the press or regulators? Consider diversity targets, something that firms are increasingly focusing on - some employees may feel disadvantaged by measures to achieve these targets and disagree with the approach and report their concerns through the whistleblowing channel. This report could indicate how the initiative and supporting communications has landed and provide an opportunity to change or adapt to ensure the next campaign is more positively understood and supported even if no wrongdoing is substantiated. In risk terms, the business risk (reputational risk, disengaged staff, staff losses) has been identified and can now be mitigated.

Whistleblowing as an integral part of risk management, note the small “r” and small “m”. It’s not necessarily something that the Risk Department need to lead, and in some cases a firm may need to conduct investigations in contemplation of litigation. I appreciate that some matters will be more technical than others.

Whistleblowing is usually communicated as the last resort – as something to be fearful of undertaking. And yes, it is the last resort just as internal audit are the last resort for many firms who have implemented some form of a 3 lines of defence model to manage its risks. However, perhaps it could be incorporated as an integral part of how a business manages its risks.

For a business, there is much to be gained in receiving internal reports of unethical or unlawful behaviour but to maximise those benefits an organisation needs to promote positive attitudes towards whistleblowing and ensure it has effective processes in place to make certain such reports are listened to, taken seriously and followed by appropriate action – just as any other risk issue would be treated and responded to.

Despite the disincentives, employees are increasingly understanding their rights and becoming more emboldened, so give them the resources and support to help keep your organisation safe.

At Shapes First we work with our clients to give you the tools you need. If this blog resonates with you and you would like to discuss it further, please get in touch. Shapes First. Helping you shape up for the future. info@shapesfirst.com #ShapesFirst