No business is immune from the possibility of things going wrong. Encouraging workers to speak up about suspicions they have can assist a business in tackling potential malpractice or wrongdoing promptly and mitigate consequential risks. Implementing and maintaining an effective whistleblowing policy and accompanying procedures is the key to achieving this.
Effective whistleblowing policies not only have commercial and reputational benefits, but can also help to reduce the risk of legal liability (assuming the procedures set out in the policy are properly implemented) by demonstrating that the business cares about dealing with wrongdoing effectively and has taken steps to prevent the victimisation of or retaliation against whistleblowers. Furthermore, effective policies may assist companies advancing defences for corporate offences such as bribery or facilitating tax evasion.
We set out below some key practical steps to take in implementing and maintaining effective whistleblowing policies and procedures.
Encourage a culture conducive to disclosure
Businesses should see their whistleblowing programme as an opportunity, not a threat. If a company’s management does not properly engage with or refuses to endorse whistleblowing, employees will lose trust and the whistleblowing programme will fail to achieve its purpose. Critically, this will increase the risk of disclosures to third parties such as the press or social media.
- Ensure that senior managers are clear and unified in communications regarding whistleblowing.
- Offer training to management on the benefits of an effective whistleblowing system and its principles and operation, and offer training to employees on the importance of whistleblowing more generally.
- Link the importance of the policy to the business living up to its corporate values.
- Place communications about the programme in prominent places to help emphasise its importance and encourage its use.
Set the right tone
A potential whistleblower will find themselves in a difficult position when contemplating making a report implicating their colleagues. Setting the right tone by starting the whistleblowing policy with an encouraging introduction and conveying that the employer will treat disclosures sympathetically and, where possible, confidentially, will help demonstrate that whistleblowers will be regarded as an asset, not a threat, and encourage disclosure.
- Set a positive tone from the outset in a preamble to the policy.
- Emphasise that reports will be treated fairly and, where possible, confidentially.
- Allow for anonymous reporting.
Send the right message, in the right way
An effective whistleblowing policy should balance the interests of the reporter and that of the business. As set out above, the benefits for a business can be numerous. However, a whistleblowing policy should also communicate its benefits to employees, including altruism and helping the improvement of business practices.
The means of communication should also be as user friendly as possible. The policy should be set out in clear and simple language. A cohesive process and terminology (for example, having only one reporting channel, and avoiding referring to it by different names) will help avoid confusion. Furthermore, whilst the legal requirements of the policy should be communicated, overly legalistic language should be avoided.
Finally, a frequent pitfall in implementing an effective whistleblower policy is a failure to communicate the existence of reporting channels or how to use them. If workers are not aware of them, no reports will come in.
- Communicate the benefits to workers of blowing the whistle.
- Emphasise that the employer will not tolerate retaliation against a reporter.
- Distinguish between disclosures and personal grievances, and clarify that complaints are not covered by whistleblowing law.
- Make clear from the outset that making a report will not be the end, but rather the start of a process, and that reports will be investigated and follow-up questions asked.
- Make it easy – use clear and simple wording, and avoid legal language.
- Having one reporting channel will help avoid confusion.
- Set the bar for a global policy at the standard required by most countries. Local variations may, if applicable, be dealt with in an appendix and local workers trained appropriately.
Know the law
The English legal framework protecting whistleblowers is comprised of the Employment Rights Act 1996, as amended by the Public Interest Disclosure Act 1998. However, businesses may need to consider other relevant legislation and guidance. For example, multinational organisations may need to look at supranational regimes (such as the EU Directive 2019/1937/EU on the protection of persons who report breaches of Union law) or local laws, as “whistleblowing” has a different legal meaning across different jurisdictions. A policy that works in one jurisdiction may not be effective in another. Furthermore, public listed companies and financial services businesses are subject to additional regulatory guidance that mandate the operation of whistleblowing procedure.
- Keep up to date with legislative developments and latest guidance and ensure that policies and procedures are reviewed at least annually to reflect legal developments or changes to best practice.
- Seek legal advice to ensure the whistleblowing policy is effective, to help reduce legal risk and potential liability, and to ensure that it works in harmony with other existing policies and procedures.
- Do not rely on confidentiality or “gagging” clauses to prevent workers from making external disclosures, as they are unenforceable if the disclosure is protected. Be careful not to take any action against a whistleblower that could amount to unlawful detriment.
Handle reports effectively
Handling whistleblowing reports effectively will be critical to a policy’s success.
- Ensure that the reporting channel is secure and confidential.
- Investigate reports promptly.
- Post-reporting care and non-retaliation are key in developing and maintaining trust in the procedure.
- Ensure that the right individuals are handling reports.
- Consider the rights of the whistleblowers, but also those of the employees who are the subjects of reports.
- Assess on a case-by-case basis whether implicated employees have a right to be represented, and if not, whether it would be sensible to arrange this nonetheless.
- Consider whether there is a risk that any employees will interfere in an investigation (for example, by destroying evidence) and, if so, what steps should be taken (such as suspension).
- If possible, inform the whistleblower of the outcome of the investigation.
Review and improve
A healthy whistleblowing programme will be the product of continual reviews and improvements, as the business learns what works for their organisation along the way.
- Monitor employee awareness, for example by including questions about the whistleblowing programme in employee surveys.
- Inform employees of the improvements to business practices that are made as a result of reports to help build trust in the programme.