The risk of corruption in an organisation is heightened if the act of reporting wrongdoings is not supported and protected.
Employees are usually the first to recognise misconduct in the workforce and other acts concerning their organisation’s workplace practices.
A recent study by The Software Alliance revealed that more than four in five (82%) employees in the UK would blow the whistle on their bosses over illegal or unethical practices at work.
Workers were found to be most likely to blow the whistle on acts such as bullying (73%), fraud (70%), theft of company property (61%), embezzlement (58%), tax evasion (45%) and failure to meet industry standards (44%).
When asked about what would prompt them to blow the whistle on their employers, 42% of respondents claimed they would do it due to moral obligations, while only seven percent would do so for a financial reward.
Interestingly, staff in Hong Kong have been reported to be steadfast in raising the alarm about misconduct or corrupt practices in their organisations.
According to a study by law firm Freshfields Bruckhaus Deringer, nearly two-thirds of management level employees have blown the whistle before.
A further 36% said they would consider doing so in the appropriate circumstances.
Some 21% of employees would go directly to regulators to address misconducts, external organisations (nine percent), media (four percent) or social media (three percent).
“Employee whistleblowers are often subject to retaliation such as intimidation, dismissal or violence from those who are engaged in the misconduct,” says Rossana Quagliana, Head of HR, Grey Group.
“This intimidation in turn, might prevent companies from discovering employee-related wrongdoings at the early stages.”
“Hence, it is extremely important to have measures in place to ensure effective protection for whistleblowers.”
Joanne Chua, Account Director – Southeast Asia Robert Walters Singapore notes that organisations should encourage more whistleblowers to come forth to raise issues that they have observed.
“If their identities are not protected, they will be deterred to step out as they can be the subject of intimidation or violence in the workplace,” she explains.
See: How to Handle Employee’s Complaints and Grievances
Whistleblowing is a double-edged sword for any organisation, Quagliana stresses.
“It encourages an open organisational culture and helps combat wrongdoings, safeguards integrity, enhances accountability, and supports a clean business environment,” she explains.
“On the other hand, a company’s reputation can be negatively affected through whistleblowing.”
Chua says whistleblowers can help to improve processes within the organisation.
“They are able to maintain the integrity of the organisation, protect the reputation of the company to external stakeholders, and be instrumental in ensuring compliance processes are being adhered to,” she shares.
On a larger scale, the Global Fraud Survey 2016 found that 51% of respondents in emerging markets consider bribery and corruption as frequent wrongdoings that occur widely in their country.
In fact, some 42% of them said they could justify unethical behaviour in a bid to ensure that financial targets are met.
Interestingly, almost half of employees polled in the survey stated they would be prepared to engage in at least one form of unethical behaviour to either meet financial targets or to safeguard a company’s economic survival.
Programmes in place
A report by Santa Clara University revealed that internal whistleblowing programmes should consist of three main objectives. They are:
However, the report noted that not all programmes can be easily implemented.
Firms can expect to face several barriers, including a lack of trust in the internal system, misguided union solidarity, and the unwillingness of employees to be “snitches”.
In addition, some employees may have to consider personal setbacks.
They include the fear of retaliation and the fear of alienation from their peers.
In its Annual Report and Accounts 2014/2015, global news and entertainment business BBC disclosed its unique approach in whistleblowing.
The firm implements a policy that enables a confidential and thorough communication through a number of means.
A whistleblowing hotline is one such method. The hotline is made available to all staff and is administered by an independent company to ensure anonymity.
“Each incident or suspicion reported is independently investigated in a confidential manner,” the report said. After which, a response is communicated and appropriate action will then be taken place.
Grey’s parent company WPP influences its organisation through its Code of Business Conduct.
This aims to set out standards where employees are required to behave in both a corporate and professional manner.
“We are committed to acting ethically in all aspects of our business and to maintaining the highest standards of honesty and integrity,” Quagliana shares.
In addition, the firm developed internet-based training modules as part of its employee induction programme.
This programme covers ethics, privacy and security, with the objective of providing guidance in making the right decisions and acting properly.
Another approach Grey adopts is its “Right to Speak” scheme.
The independently operated communication channel ensures that complaints are addressed by the relevant people in the event an employee feels uncomfortable raising an issue publicly.
There are several approaches that HR can take to promote and protect whistleblowers.
Quagliana suggests that HR can help by promoting a culture of strong ethics, integrity and compliance.
In fact, its code of conduct ensures that these areas are supported.
“Openness and clear communication help employees understand that they are able to raise their concerns without fear of reprisal,” she says.
“HR ensures that whistleblowers and the information they share are kept under strictest confidentiality.”
“HR also plays an impartial role so that employees feel comfortable with coming forward.”
One effective measure Chua suggests is to implement internal processes for employees to speak up confidently.
Such a channel can encourage staff to be able to raise malpractice concerns to their management.
She also advises firms to prioritise employees and ensure that there is an appropriate venue for them to speak up.
“Most companies should aspire to ensure staff feel enabled to voice their concerns,” adds Chua.
“If any individual wants to raise their concerns confidentially, companies should make every effort to keep their identity a secret.”
|Three steps to minimise workplace misconduct
Source: Global Fraud Survey 2016
|Misconduct drives employees away
Employees in Asia-Pacific could be driven away from a company if it is found to be participating in a corrupt business.
A survey by Ernst & Young entitled, “Fraud and Corruption – driving away talent?” found that 80% of staff claimed to be reluctant to work for companies that are involved in bribery or corrupt practices.
Rob Locke, Lead Partner of Ernst & Young’s Fraud Investigation and Dispute Services, notes that a strong leadership strategy is vital to ensure employees feel their company is working ethically.
“More broadly in Asia-Pacific, where the labour market is highly competitive and it is already difficult to recruit and retain staff, the findings should be a wake-up call to businesses,” he said.
“Only five percent of all respondents said it would make no difference to their willingness to work for an employer if the company was found to have been involved in bribery and corruption.”
“It is essential that companies comprehensively address this via strong ethical leadership and a cohesive fraud prevention framework, with up-to-date and well-enforced internal controls, policies and procedures.”
|Largest whistleblower award
Does it pay to be a whistleblower? The answer may be in the affirmative.
The US Commodities Futures Trading Commission (CFTC) has announced a record award of more than US$10 million. This will be presented to any whistleblower who can provide key original information that leads to a successful enforcement action.
“A whistleblower can be anyone who observes unlawful behavior like support staff, interns or personal assistants,” said Rob Garson, a partner at GS2Law.
“You don’t have to be an executive or a trader to be a whistleblower.”
The article first appeared on HRM Asia.
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