5 Steps to Create a Whistleblower Compliance Program

5 Steps to Create a Whistleblower Compliance Program

Encourage employees to blow the whistle

A corporate whistleblower compliance program is a critical step to ensuring an organization is conducting ethical business in today’s highly regulated business environment. An effective whistleblower program is an important part of an organization’s internal controls process and is an important component to detecting and preventing ethical violations.

Having a documented set of internal policies and processes that demonstrate when employees can report wrongdoing, and how to do it in complete anonymity, will help reinforce the organization's commitment to creating an ethical culture.

It's important to promote compliant and ethical behavior, and exercise due diligence to prevent and detect criminal conduct, otherwise you'll find your organization is subject to fines, periods of probation for federal offenses, securities, bribery, fraud, money laundering, criminal business activities, extortion, embezzlement, conspiracy, and other activities that ruin reputations and have unforgivable financial stress.

A well functioning whistleblower compliance program will demonstrate the organization’s commitment to conducting business within the law while informing employees about their obligations to legal duties, and what potential repercussions could happen when not complying with internal protocols.

Some immediate benefits of a well thought out whistleblower program include:

  • Helps maintain a good reputation
  • Helps create an ethical culture
  • Reduces litigation costs, and fines
  • Reduces bad publicity and the disruption to business operations
  • Improves the ability to recruit and retain staff
  • Improves the ability to attract and retain customers and suppliers

One organization's whistleblower program is going to differ from another organization's because of differing business types and industries. There is no ‘one size fits all’, but the basic components are the same. You have internal and industry rules and regulations you need to take into account, as well as everyday business risks that are going to happen, and you have employees who are able to let you know when something is wrong if they see something wrong.

No matter the size or type of business, a check-the-box mentality is just not complex enough to satisfy regulators like the DOJ, SEC, and FCPA, or even the public who you may depend on. No matter the organization, a whistleblower program that is well structured and implemented purposefully should help in the effort to detect violations that do occur, and make it more efficient to initiate an appropriate outcome.

5 Steps to Create a Whistleblower Compliance Program

Your compliance program should be adapted to your organization’s specific industry, business, and risks. The following are steps you can take to create your compliant whistleblower program.

  • Reinforce Anonymous Reporting

One of the more common fears of employees wanting to report misconduct is that someone may recognize their voice. This can be because of an accent, or a specific way someone speaks. This can be a detriment as an employee may not wish to report an incident if they don’t feel they can remain anonymous. When filing a report, a whistleblower should have confidence in their anonymity being preserved. Having a sense of security in reporting misconduct can promote a culture of open and honest communication within the organization.

Your whistleblowing hotline should be able to accommodate a 2-way anonymous dialogue with the whistleblower. This way management is able to ask more questions or clarifying information from the whistleblower without either party revealing their identity.

  • Consistency With Anti-Retaliation

Trusting an employer’s whistleblower program, without fear of retaliation, is essential to motivating employees to report suspected unethical misconduct internally, and not take their concerns outside the company. One of the biggest obstacles employers face is earning the trust of employees. The biggest factor driving an employee’s decision to not speak up is fear of someone finding out who they are, and fear of retaliation if they do speak up.

Part of your whistleblower program should contain expectations around zero retaliation of any kind. Communicate zero tolerance for any type of retaliatory or discriminatory action. Retaliation to any complaint is prohibited and could result in serious disciplinary action. Also communicate zero tolerance for discussing discrimination allegations with each other. This could result in unintentional additional retaliation.

  • Make Reporting Easy for Everyone

Offer multiple reporting mechanisms. Your employees aren't the only people with eyes and ears on your organization. Unethical conduct can be observed by contractors, vendors, customers, and members of the public. If your whistleblowers can access your program via phone, email, and web, all parties have different options open to them and they'll be more inclined to choose their method and make their report.

Today it is crucial that companies have effective whistleblower hotlines as part of their corporate compliance programs that provide a safe and secure method for employees and other stakeholders to blow the whistle on unlawful conduct internally first, instead of turning to regulators first.

  • Create a Speak-Up Culture

Encouraging employees to speak up when they see something wrong, or when they have an ethics question or concern gives organizations an upper hand on misconduct that could become very damaging. Your whistleblower program is an early warning system that that allows management to learn of and address potential issues before they get out of hand.

Taking steps to minimize the risk of fraud and workplace misconduct is important for any organization. That’s why whistleblower programs and reporting tools are so fundamental for many companies. Such tools serve as an easy way for employees to tip off management about unethical practices and misconduct in the workplace without fear or repercussion, meaning it can help to uncover any wrongdoing or illegal behaviour.

  • Address Every Allegation

Don't ignore any allegation that gets reported. By responding to complaints, you're showing an interest in what whistleblowers are feeling or experiencing that made them come forward in the first place. Not all allegations may need outside help - ie. stealing, harassment, etc. Some may actually be HR queries. But by communicating with the whistleblower, keeping them informed of the process goes a long way!

Once you have your compliance program in a functional state, you'll have to ensure:

  • Is it well designed?
  • Is it applied in good faith?
  • Does it work?

Should your organization find itself suddenly the focus of felonious conduct, having an effective ethics and compliance program in place, and partnering with a trustworthy whistleblower hotline vendor can greatly reduce any sentencing or fines the organization can incur. By protecting your organization with a comprehensive ethics and compliance program, you lessen your chances of facing major fines and violations. In some cases, regulators will lessen violations, or cast aside incidents altogether, due to the well functioning compliance program existing in that particular organization.

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photo Amanda Nieweler
About the Author
Amanda writes for WhistleBlower Security about ethics, compliance, workplace culture, and whistleblower hotlines. Amanda brings her nearly two decades of risk and compliance experience to the WBS blog where she is dedicated to helping people and companies promote speak-up cultures.

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