Companies need to recognize the benefits of whistleblowing
Whistleblowing is central to the plurality of checks and balances which allow businesses to thrive. In its report, How whistleblowing helps companies, ICAEW’s Corporate Governance Faculty elaborates on the importance of effective whistleblowing and provides essential guidance for boards on how to create environments that encourage it.
Whistleblowing can be of enormous value to companies, but still many organisations do not promote a culture or provide policies that encourage employees to report deficiencies. This guide captures how companies can benefit from whistleblowing and provides a five-point action plan for boards on how to create systems and environments in support thereof.
Elizabeth Richard, ICAEW’s Head of Corporate Governance, said: “Whistleblowing is a very contentious topic. If it helps to increase profits or prevent financial loss, whistleblowing is praised and applauded but if it exposes other kinds of deficiencies it is often scorned. This separation needs to stop. Whistleblowing offers companies a chance to get honest feedback which is not corrupted by self-interest or personal motivations and it should be seen as an opportunity for improvement - irrespective of the deficiency exposed.”
She went on to say that: “While directors cannot be aware of all operational details of the companies they lead, they are expected to ensure that problems are identified so that they can be dealt with. For this reason and many others, it should be in the directors’ and senior managers’ interest for whistleblowing to be a key tool towards effective management and strong corporate governance. But there needs to be a supportive environment and operational system in place that encourages employees to speak up about deficiencies and problems they observe without fear of potential consequences.“
The guide, How whistleblowing helps companies, is available here