In theory at least, blowing the whistle on workplace wrongdoing is easier than it ever was. And since the passing of the Public Interest Disclosure Act in 1998, all companies should have a whistle-blowing policy in place.
PKF partner David Dearman believes that there’s a five point strategy that points the way to having such a policy:
- Explain the issue. Agree on a sense of right and wrong with your employees by explaining how wrong-doing affects your organisation whilst highlighting the effect it has on jobs and morale.
- Encourage reporting. Ask employees to keep you informed. Stress that you want to know when something is a concern – not only when there is proof, and warn them that they must never try to investigate matters themselves.
- Set a good example. Make it clear what conduct is acceptable and what is not by how you act. Encourage staff to seek clarification if necessary and deal seriously and fairly with wrong-doing. You will be judged by example.
- Be supportive. It can be awkward or embarrassing to raise concerns. Ensure that employees know they have someone to turn to and make it clear that those raising concerns will be protected from reprisals.
- Once a good culture is in place make sure it continues to work.
But, speaking to sister site AccountingWEB, Dearman acknowledges that whistle-blowing can be extremely difficult – not least if you’re working in a small or medium sized company, there are fewer levels of management, and are, you suspect that wrong-doing goes to the very top.
“Small size really shouldn’t be a barrier to having a good whistle-blowing policy in place…and the start of that should be cultural. It should be about the way that senior management and directors conduct themselves. If senior personnel are using business assets for their own personal use, or disappearing most afternoons at 2 pm to play golf, then that sets a very bad example.”
Dearman says that while every company should have a formal policy statement in place, it is hard to know who to report to. “If you suspect that the people running your company are involved in lewd business practices, or false accounting, or whatever, but you’re dependent on the job for your livelihood, well yes, that is definitely a very invidious position to be in.”
Were he in the same situation, he says, he would probably contact the company’s professional service advisers – lawyers, accountants, or auditors – whose first task would be to gauge whether it was a genuine call or a spurious accusation. In most cases, tip-offs are likely to be anonymous: “Our audit team recently had an anonymous tip-off about a company – the team took it seriously, and it led to an investigation into malpractice within an overseas subsidiary.”
It is of course easier for senior management to perpetrate fraud than less exalted employees – they have the technical ability, knowledge of business systems, and understanding of internal controls required to do so – they’re also under less scrutiny. It isn’t unknown, for example for accounts to be inflated in the run up to an AIM listing. So what to do where senior personnel suspect colleagues of a similar seniority – other directors or executives – of some form of malpractice? Should a quiet word suffice?
“Very hard”, admits Dearman, “Especially if these are close colleagues. I’d say take it further than a quiet word, but it does depend on situations.”
The way a company deals with the aftermath of malpractice also varies. One PKF client, a charitable organisation, recently caught its Managing Director and his wife fiddling the books, and chose to make an example of him by pursuing an action for fraud. Not all organisations – particularly banks, or those in the financial services industry – like that kind of publicity.
Anonymous whistle-blowing on corporate wrongdoing or malpractice can be made online at:
There is also a national helpline – 0207 404 6609.
HRZone would very much like to hear any members’ experience of whistle-blowing – (anonymously, of course)
2 Responses
Whistle Blowing Policies Don’t Work
Unfortunately, although many companies have a code of ethics and whistle blowing policy, reasearch conducted on their impact is quite clear: they don’t work. Whistle blowers still tend to suffer for their act. And on behalf of management, it is more than a little difficult to discern the difference between a legitimate whistle blower and a disgruntled employee.
What does work is equally clear: honest executives. Honest executives act honestly.
Employees are scared of loosing their jobs
Not strictly whistle blowing as it wasn’t an issue with an individual colleague but… Years ago I had a temping job in an office where architectural drawings had to be copied on a large copier with some nasty chemical. The copier was in a room without any ventilation and the fumes made staff feel ill. I complained to the Personnel Manager, who spoke to the Director for whom I was temporary P.A. I don’t know the outcome as I was only there a few more days but both the Personnel Manager and Director were grateful that I’d raised the issue – as were collauges who had been too scared to raise the issue for fear of it affecting their propects within the organisation.