(LRN's Sarah Cole contributed to this article)
The importance of new whistleblower protection laws cannot be understated, given the retaliatory actions and blowback experienced historically by whistleblowers.
The European Union's Whistleblower Protection Directive takes effect next December, and guarantees people who speak up and report wrongdoing won't face retaliation. Areas of reporting covered under the law include financial services; money laundering; product and transport safety; public health; environmental protection; consumer and data protection.
The directive was approved in 2019, but EU nations received two years to align their own rules with the national law. Each EU nation must have a set of minimum requirements to protect whistleblowers and safeguard against retaliation.
Some of the law's main elements include:
- The creation of effective, efficient and confidential reporting channels in companies of more than 50 employees;
- A hierarchy of reporting channels to encourage whistleblowers to report issues internally, although they can do so externally without losing protections, or confidentiality; and
- Protections for whistleblowers from retaliation measures, such as suspension, intimidation, and demotion. This applies to people who assist whistleblowers, such as colleagues and family.
The directive underscores the importance of whistleblowers as an important tool in the enforcement of EU law.
Whistleblowers have been instrumental in bringing to light a number of recent scandals and misconduct issues, many of which were prosecuted by the UK’s Serious Fraud Office, the European Anti-Fraud Office, and the French Anti-Corruption Agency. In announcing the directive, the European Commission referenced the importance of whistleblowers in scandals such as LuxLeaks, Cambridge Analytica, Panama Papers, and Paradise Papers.
The directive sends a strong message to organisations, and reinforces the significance of proactive preventative measures that shouldn't be underestimated when it comes to corporate misconduct.
"It's likely that we’ll see a spike in misconduct as a result of the pandemic; therefore, it’s crucial that companies take a closer look at the current systems they have in place to protect whistleblower," said Ty Francis MBE, Head of Advisory at LRN. "Instilling a values-based culture has never been more important to ensure that companies reinforce these principles and double down on acting with integrity. Prevention is always preferable to finding a cure.”
So, what can organisations do to mitigate the potential for misconduct?
One crucial element to prevent misconduct is to create a culture of trust, where employees are comfortable speaking out and listening without fear of retaliation. Trust is a catalyst that enhances performance and binds people together and encourages ethical behaviour.
Organisations should seek strategies to measure how their ethics and compliance programs are supporting or discouraging behaviours that align with their company values and promote trust. Simple in-house surveys and hotline temperature checks are a good place to start for many companies.
Organisations seeking ultimate resilience and best practice should also take advantage of digital strategies such as benchmarking their programmes with data and analytics, case management tools, and culture assessments undertaken by external, unbiased, advisors to better understand the efficacy of their programme.
As many of us know, it is often not the information that is reported that causes the largest concern, it is the incidents that go unspoken that can really burn holes in the fabric of the organisation. By developing a deliberate, proactive approach to promoting a speak up culture companies are investing in a long term sustainable programme that protects both the organisation and individuals.
Working with many global organisations LRN provides strategies and solutions to promote and measure organisational trust, enhanced by real-time digital reporting, assessments, content and case management tools. LRN’s partners find providing access to alternative ways to raise issues can lead to increased confidence in making the decision to disclose information.
About the Author
Over the last decade Mike Wright has been guiding global organisations to achieve the highest standard of sustainable ethical integrity. He has worked as a trusted advisor with hundreds of Ethics and Compliance Professionals, General Counsel’s, HR Leaders and Board Members, to design, implement, and measure constantly evolving, best-in-class, global Culture, Ethics and Compliance programmes. Mike is passionate about balancing the human elements of Culture and Ethics with the complex requirements of regulatory governance and compliance, increasing programme effectiveness, and building a brand of ethics and compliance through innovative world class engagement and training strategies. Mike is a qualified Executive Coach, International Change Management Professional and Fellow of the Royal Society of Arts.More Content by Mike Wright