Posted June 28, 2009on:
Whistle blowing is that to publicly allege concealed misconduct on the part of an organization or body of people, usually from within that same organization. This misconduct may be classified in many ways; for example, a violation of a law, rule, regulation and/or a direct threat to public interest, such as fraud, health/safety violations, and corruption. Whistle blowers may make their allegations internally (for example, to other people within the accused organization or externally (to law enforcement agencies, to the media or to groups concerned with the issues).
Establishing effective reporting mechanisms is one of the key elements of a fraud prevention program. Many scams are discovered or suspected by people who arent involved in them. The challenge of employees is to encourage witnesses to speak out by showing that it is very much in their own interests. Organizations that can overcome the culture of silence and encourage openness are likely to benefit in many ways.
In the UK there is no legal requirement for companies to have a policy on whistle blowing. But listed companies are obliged under the Combined Code to have whistle blowing arrangements or explain why they do not, while public bodies are expected to have them. Firms that are subject to the US Sarbanes-Oxley Act 2002, are also required to have whistle blowing arrangements.
According to Public Concern at Work’s best-practice guidance, a whistle blowing policy should make the following points;
- The organizations take malpractices seriously. Here it should give examples of the type of concerns to be raised, thereby distinguishing a whislte blowing issue from a grievance.
- Employees have the option to raise their concerns outside their reporting line. Here the policy should give guidance on when and how concerns may properly be raised outside the organization.
- Employees may access confidential guidance from an independent body.
- The organization will, when requested, respect the confidentiality of anyone raising a concern.
- The victimization of a whistle blower will be treated as a disciplinary matter- as will any malicious false allegation.
– CIMA, UK