Whistle Blowing Policies
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GIIRS Emerging Market Assessment Resource Guide: Whistle Blowing Policies
What’s in this Guide? I. Definition: What is a Whistle Blowing Policy? II. Code of Ethics III. General Whistle Blowing Implementation Guidelines IV. Whistle Blowers Procedures Models/Templates V. Resources/Links
I. Definition: What is a Whistle Blowing Policy? Whistle blowing refers to the disclosure of information by an employee or other agent of a company about a perceived wrongdoing within the organization. A Whistle Blowing policy is a company statement that protects those individuals from retaliation or repercussion if they bring to attention any negligence or wrong-‐doing within the company. 1 A company should implement a whistle-‐blowing procedure to encourage employees to communicate their concerns about illegal, unethical or questionable practices to the Board and senior management without fear of reprisal. Such communication should be made anonymously, so as to prevent any nuisance or negative reaction by the other employees or employees’ supervisors. Whistle blowing policies and guidelines should be implemented within organizations and companies of any size, and whether publicly or privately owned, to reinforce ethical behavior among staff and employees. These policies need to be written and available to employees in order to be executed and handled effectively by the organization. Inserting a Whistle Blowing policy into your corporate code of ethics is a good place to start. Most cases of whistle blowing remain internal to a company. External whistle blowing is when an employee reports misconduct to someone outside of the company, often the media, watchdog groups, or law enforcement. Internal whistle blowing allows the company to take appropriate corrective actions before the misconduct becomes a public issue. Therefore it is necessary to put in place confidential reporting mechanisms that protect employees against any potential retribution. Without a written policy, whistleblowers may face severe repercussions for their actions, including workplace retaliation or dismissal, psychological damage and/or physical harm. Ensuring employee
1 This definition was developed in the framework of the Transparency International project “Blowing the Whistle Harder -‐ Enhancing Whistleblower Protection in the European Union”.
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GIIRS EM Resource Guide: Whistle Blowing Policies protection for speaking out and implementing mechanisms for proper investigation of disclosures are essential for any potential negligence or wrongdoing to be exposed in your company. 2 II. Code of Ethics A Code of Ethics and Small Businesses A Code of Ethics (also known as a Code of Whistle blowing policies are generally Conduct) is a formal document that establishes included in an organization’s code of ethics behavioral expectations for the company and or code of conduct. A code of conduct the people who work there. applies to everyone who works for the Although small businesses are usually organization. They usually cover a wide characterized by informal understandings and range of policies and standards that serve shared expectations among the workforce, a as a framework for organizations and its code of ethics can describe and reinforce the employees. 3 No set of ethical standards can company values and culture, so that they are be comprehensive and anticipate every clear to all stakeholders. It can also guide and possible eventuality. However the code of support employees in their conduct and conduct framework provides a starting provide a context for them to raise concerns. reference point for employees and For more information on codes of conduct, see management. our GIIRS Emerging Market Resource Guide: III. General Whistle Blowing Creating a Code of Ethics Implementation Guidelines When developing a Whistle Blowing policy, the procedure should consider the following issues: x When? The system should be implemented after (i) consultation with employees, of the representatives of the employees, or the trade unions, and (ii) having individually informed each employee that such procedure has been implemented in the Company. x What? Illegal and unethical behaviors should be clearly defined and well disclosed. x Who? The question to be answered here is who is subject to this procedure. Should all employees be concerned? It is recommended that your company subject all its employees to the whistle blowing procedure, so as to ensure the widest protection of the interests of the company and employees. x How? The technical means for the transmission of information about a potential incident should be well defined: telephone, postal denunciation, e-‐mail or even physical presence. In addition, the addressee of such concerns should also be identified. The treatment of the denunciation could even be assigned to a third-‐party or organization.
2 International conventions like the UN Convention Against Corruption, the African Union Convention on Preventing and
Combating Corruption, the Anti-‐Corruption Action Plan for Asia and the Pacific, and others, commit the signatory countries to implementing appropriate legislation regarding employee protection and efficient and trustworthy investigation mechanisms. An increasing number of governments are considering legislation. 3 http://www.rti.org/pubs/CodeConduct.pdf
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GIIRS EM Resource Guide: Whistle Blowing Policies x
Which consequences? If the denunciation does not incur any result, the employee who triggered the procedure should not be held accountable, except if such denunciation was made maliciously. The person should be presumed innocent until the wrongful behavior is proven and have access to all data regarding the denunciation.
IV. Whistle Blowers Procedures Models/Templates The Institute of Business Ethics is a charity based in London and its vision is to disseminate knowledge and good practice in business ethics. Their website provides useful information on implementing ethics codes. The “examples” section under “Codes of Ethics” provides a wide selection of companies’ codes. Their “Resources” section provides links to business ethics organizations in many emerging markets. http://www.ibe.org.uk/index.asp?upid=80&msid=69 The Code of Corporate Governance in Nigeria outlines a Whistle Blowing policy to enable disclosure and appropriate handling by concerned persons/board http://www.sec.gov.ng/uploads/laws/20110212544608Approved%20Code%20of%20Corporate %20Governance.pdf V. Resources/Links UN Convention against Corruption (UNCAC) (article 33) http://www.unodc.org/pdf/crime/convention_corruption/signing/Convention-‐e.pdf African Union Convention on Preventing and Combating Corruption (article 5) http://www.africa-‐ union.org/Official_documents/Treaties_%20Conventions_%20Protocols/Convention%20on%20Co mbating%20Corruption.pdf Anti-‐Corruption Action Plan for Asia and the Pacific (pillar 3) http://www.oecd.org/dataoecd/38/24/35021642.pdf Southern African Development Community Protocol Against Corruption (article 4) http://www.sadc.int/index/print/page/122#4 Transparency International http://www.transparency.org/global_priorities/other_thematic_issues/towards_greater_protectio n_of_whistleblowers/the_need_for_whistleblower_protection
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