Whether it is to reduce losses due to fraud, build a loyal workforce, or prevent serious injuries in the workplace, the benefits of whistleblowing are something that any organisation needs. The right policy and reporting channel can be an important part of any whistleblowing programme’s success.
Boards play a crucial role in the implementation and adoption of an internal whistleblower solution, not only because they need to ensure the company’s compliance with legislation but also to act on behalf of the shareholders in safeguarding the company’s future, both financially, culturally and reputationally.
In short, the five reasons to implement a whistleblower solution are:
- Increased awareness
- Add a layer of protection
- Create an open culture
- Prevent unwanted media attention
- Prevent problems from escalating
Let us take a closer look at these five reasons.
1. Increase awareness
Without whistleblowers, it is easy for organisations to be unaware of illegal or unethical activity happening right under their noses: a nightmare for any board. The information that whistleblowing conveys, regardless of the degree or nature of it, can increase awareness of issues and problems within an organisation that need to be addressed.
With such knowledge in hand, an organisation can learn, grow and prosper, and the board can fulfil its obligation to the shareholders. Therefore, a proper whistleblower system is crucial to deal with violations in a quick and constructive way.
2. Add a layer of protection
All organisations should have a whistleblowing policy and clear routines for whistleblowing. Large or well-known companies risk getting massive negative media attention or losing funding if they end up mired in a scandal. Smaller companies can be completely destroyed by an ethical offence.
For newly formed organisations, a whistleblowing policy should be among the first to be established, closely after the code of conduct. With employees who receive the right training and have access to a secure method of internal reporting, your organisation has an extra layer of protection.
Thus, whistleblowing should not be seen as an optional add-on, but rather as a crucial cornerstone of any organisation.
3. Create an open culture
An organisation that actively encourages employees to report concerns, and supports them if they do, gains more confidence, both internally and eventually also from the public. An open and honest culture usually creates better working relationships and commitment that results in higher productivity and increased shareholder value.
In addition, loyal employees are more likely to make an internal report rather than disclose information externally. This allows the organisation in question to handle and solve problems internally, rather than being lambasted on social media or in traditional media. The difference between internal and external whistleblowing is crucial to understand in this context.
4. Prevent unwanted media attention
Companies, their management, boards and employees are constantly in the news for misconduct, including harassment, discrimination, fraud and misrepresentation of data.
Whistleblowing is an effective internal tool that enables company leaders to identify problems in the workplace and address them. Keeping your organisation scandal-free and outside the media will make it more appealing to potential investors, stakeholders and future employees. This is why internal whistleblowing is superior to external such.
5. Prevent problems from escalating
One of the most important benefits of an effective whistleblowing solution within an organisation is that it provides the ability to detect problems early. When the information is shared directly with the dedicated whistleblowing team, the organisation can deal with the problem immediately, before it escalates and becomes out of control.
This in itself can prevent serious harm to staff, company or shareholders. Reducing risks and dealing with problems early also means that an organisation can focus on what is really important: the business. However, you can only focus on the business if the risk of problems inflating is minimised.
Implement a policy—and listen
Although there are a large number of different reasons and benefits for implementing a whistleblowing solution, the aforementioned five are the most important for boards to take into account. An effective solution increases awareness of the ethical rules that apply to the organisation while reducing the risk of problems even arising in the first place. Once problems occur, whistleblowing often prevents the problems from escalating.
It should be a cornerstone of your organisation to create an open culture where employees feel they can report when something goes wrong. By reporting and handling problems internally, you also prevent unwanted media attention. The result is a reliable organisation where employees both thrive and feel good.
In almost all scandals that have reached the media, the organisation in question had flawed whistleblowing routines. In the rare cases where reporting channels were in place, the recipients of the report(s) decided not to listen.
A whistleblower solution is undoubtedly a must-have that every board should implement in their organisation. But if you don’t take reports seriously, any solution is in vain.
Daniel Vaknine is CEO of Visslan, a Nordic-based whistleblowing solution.