Whistleblowing and the Audit Committee
- Publish date: 01 March 2018
- Archived on: 01 March 2019
Having a trustworthy whistleblowing process in place has become increasingly important as more and more high profile whistleblowers come to prominence in the media.
Having a trustworthy whistleblowing process in place has become increasingly important as more and more high profile whistleblowers come to prominence in the media. Oxfam is the most recent well known organisation to become enveloped in a scandal and a whistleblower who identified the issue has alleged that the problems could have been addressed some time ago.
The UK Corporate Governance Code, updated in April 2016, states that is the duty of the Audit Committee to ‘review arrangements by which staff of the company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters’. On 7 February, the Corporate Governance Community held its first webinar of 2018 on the subject of whistleblowing and fraud. Our speakers were Ian Foxley, a whistleblower, who recently appeared on the BBC programme House of Saud and Dino Bossi from Addveritas. We opened the webinar asking:
Do you have confidence in your organisation’s whistleblowing system?
Yes – 54.2 %
No – 29.2%
Not Sure – 16.6%
The responses show that we have some way to go to provide a trustworthy whistleblowing system that will encourage people to raise any issues and allow organisations to address them.
Following the webinar presentations, there were a large number of questions for our speakers. Both favoured an internal ‘Speak Up’ mechanism to encourage staff to raise their concerns internally and to allow the organisation to address them. External disclosures will cost the organisation more time and resource to either defend its activities or to address the issue.
Dino Bossi used the word ‘zeitgeist’ to describe the current mood around the issue of whistleblowing. His view was that individuals who are unfairly treated have an ability to make their voices heard due to the availability of technology and social media. A ‘Speak Up’ culture in organisations is helpful in identifying any potential problem. It also avoids using the term ‘whistleblower’ which has negative associations. Foxley and Bossi advocated rewarding whistleblowers through positive recognition and/or a cash bonus to encourage others to take this brave step. Other topics covered were the Public Interest Disclosure Act (PIDA), the use of compromise agreements and dealing with vexatious employees.
Turning to the Corporate Governance Community’s 2018 webinar programme, it will have comprehensive coverage of the issues affecting the Audit Committee. Chartered Accountants are often members of the Audit Committee because of their financial expertise. The Audit Committee has a broad range of responsibilities, one of which is to ensure that whistleblowing processes/ arrangements are in place. The Corporate Governance Communities next webinar will cover the role of Audit Committee Chair, its being held on 8 March at 1-2pm and our speakers are:
- Angela Crawford-Ingle who is a Senior Independent NED at River and Mercantile Group PLC, NED at Swinton Group Ltd, Independent NED at Beazley Plc and Founding Partner at Ambre Partners Ltd and
- Tim Copnell, Chairman of KPMG's UK Audit Committee Institute.
Both speakers bring a wealth of experience to the webinar from a wide range of organisations including Angela’s experience at 2 FTSE 250 organisations.