The Whistleblowing Program Handbook

A practical guide to running a whistleblowing program in Australia

Elizabeth Ticehurst

• Publisher: Elizabeth Ticehurst
• Year: 2020
• eBook ISBN: 9780648995326
• Edition: 1
• Topic: Law
• Subtopic: Law Theory & Practice
• Index: Law

An effective whistleblowing program can improve workplace culture and reduce legal risks, as well as encouraging a culture of transparency, accountability and integrity.The Whistleblowing Program Handbook bridges the gap between legal theory, academic analysis and practical application and is a must-read for anyone involved in handling disclosures of wrongdoing within an organisation.Whistleblowing is a human process that involves people and emotions, and sometimes unpredictable behaviour. This handbook describes how to create an effective whistleblowing program that reduces the organisation's legal risk, but also recognises and allows for the human needs and emotions of those who are involved in it. It explains how to:

• Draft an accessible policy;
• Put together a program team;
• Design your program appropriately with regard to the size of the organisation and its risk profile;
• Communicate effectively with disclosers; and
• Provide support for disclosers and people who are implicated in a disclosure.

1.Why is whistleblowing important?

Regulatory compliance and good governance are obvious reasons to encourage whistleblowing. An effective and fit-for-purpose whistleblowing program is now accepted as a key component of an effective corporate governance framework. The current ASX Corporate Governance Principles and Recommendations,¹ for instance, recommend that listed entities should have and disclose a whistleblower policy.

Whistleblowing can also affect the organisation’s financial standing. Research has shown that whistleblowing is the most effective method of exposing serious economic crimes and is more successful than the combined effect of corporate security, internal audits and law enforcement.² From a financial perspective, the sooner an organisation can become aware of instances of fraud, corruption or mismanagement, the sooner it can stop the damage and prevent future losses.

An effective whistleblowing program can also improve workplace culture and reduce the risk of employment-related claims by bringing to light any festering cultural or safety issues. It is widely accepted that whistleblower protection encourages a culture of transparency, accountability and integrity.³ This can assist the organisation to attract and retain talent and reduce the costs associated with unnecessary turnover of staff.

Despite the evident benefits of whistleblowing, it is difficult to find examples of positive outcomes for whistleblowers. Most stories reported in the media focus on negative and unfair treatment of those who make disclosures. These reports may not be reflective of the true situation, because when whistleblowing reports within an organisation are appropriately handled, responded to, and kept confidential, these stories are never made public. An effective whistleblowing program is a silent achiever that cannot boast about its own triumphs, despite its vital importance to the organisation.

The news you will never see

Words and labels

The word ‘whistleblower’ has come to be viewed by some in a negative light.⁴ A person who makes a report may not wish to be labelled a whistleblower, or may not consider their complaint to be a whistleblowing matter. Many organisations have sought to avoid this by using different labels such as ‘speak-up’ programs, ‘ethics’ hotlines and ‘integrity’ policies. The legislation in Australia uses the term ‘whistleblower’, but organisations can use more neutral terms if they wish. In this book, except when using a legally defined term, I refer to whistleblowers most often as ‘disclosers’ and to whistleblowing disclosures as ‘reports’.

---

¹ ASX Corporate Governance Principles and Recommendations, Recommendation 3.3: https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-fourth-edn.pdf.

² See for example the results of three studies summarised in Proven Effectiveness of Whistleblowers, National Whistleblowers Center: https://lib.ohchr.org/HRBodies/UPR/Documents/session9/US/NWC_NationalWhistleblowersCenter_Annex2.pdf.

³ Parliamentary Joint Committee on Corporations and Financial Services, report on whistleblower protections in the corporate, public and not-for-profit sectors, Section 2.2: https://www.aph.gov.au/Parliamentary_Business/Committees/Joint/Corporations_and_Financial_Services/WhistleblowerProtections/Report.

⁴ See for example, Penman, Carrie, ‘It’s Time to Reconsider the Term “Whistleblower”’: https://www.corporatecomplianceinsights.com/reconsider-term-whistleblower/.

2.Whistleblowing programs

A whistleblowing program is a system designed to ensure that whistleblowing reports within an organisation are dealt with appropriately and in accordance with the law. There is a range of State and Federal laws in Australia aimed at protecting whistleblowers, which is described in more detail in Chapter 3. In the private sector, most entities above a certain size are also required by law to have a whistleblower policy. Even if an organisation is exempt from this policy requirement, it must still comply with the laws that protect whistleblowers. A policy alone will not achieve compliance unless it is implemented and enforced. Most organisations will therefore require a whistleblowing program.

There is an inherent tension between the perspectives of the discloser and the organisation in relation to their expectations of the whistleblowing program. Whilst the organisation will be more concerned with the program’s role as a governance tool and a system for reducing the organisation’s legal risk, the discloser will likely place more importance on how the program supports them and acts on their report. An effective whistleblowing program will need to reach a balance between these two perspectives.

As explained in Chapter 4, the potential liabilities for failing to properly handle a whistleblowing report are severe. A legalistic approach that seeks to tightly control this liability may result in a program that steers the discloser through a very narrow reporting process. This process may possibly be effective in reducing potential legal liability in relation to internal whistleblowing. However, it will likely be an uncomfortable or intimidating experience for the discloser and may discourage them from making reports to the organisation. A discloser faced with an unfriendly internal process may be more inclined to take their report to an external party, exposing the organisation to additional reputational and regulatory risks.

From the discloser’s perspective, a good whistleblowing program should:

•be accessible;

•be easy to understand;

•be supportive and empathetic to the situation of the discloser;

•take the discloser’s report seriously and take immediate action;

•protect the discloser from any possible repercussions;

•reward or acknowledge the discloser for coming forward;

•allow the discloser to remain anonymous if they wish;

•not take up much of the discloser’s time;

•allow the discloser not to be involved in any investigative process if they wish;

•keep the discloser updated on developments and outcomes; and

•result in a positive change for individuals (including the whistleblower) and/or the organisation as a whole.

From the organisation’s perspective, a good whistleblowing program should:

•protect the organisation and its Eligible Recipients from legal liability;

•comply with applicable legislation;

•prompt disclosers to make reports in a predictable way through a dedicated channel, which is staffed by individuals who are trained to handle such reports;

•require minimal time from managers and executives, who have other jobs to do;

•encourage disclosers to come forward with all information about fraud, corruption, misconduct or mismanagement;

•result in early detection of wrongdoing and protect the organisation’s bottom line; and

•protect the organisation’s reputation by discouraging disclosers from making reports to external parties such as regulators or the media.

Clearly, no whistleblowing program will be able to meet all of these competing expectations. Whilst the organisation has control over the design and implementation of the whistleblowing program so its aims will ultimately have precedence, the discloser’s perspective should not be ignored. Whistleblowing reports will often involve messy interpersonal relationships, motivations and emotions, which are not taken into account by legislation, rules or policies. A good whistleblowing program should recognise and balance these human elements with the objectives of the organisation and the requirements of the law.

3.Legal framework

Whistleblower prote...

Table of contents

• Cover
• Title Page
• Copyright page
• Dedication
• About the author
• Foreword
• Contents
• 1. Why is whistleblowing important?
• 2. Whistleblowing programs
• 3. Legal framework
• 4. Legal protections for whistleblowers
• 5. Whistleblower policies
• 6. An effective whistleblowing framework
• 7. The whistleblowing program team
• 8. Reporting channels
• 9. Anonymity
• 10. Assessment
• 11. Investigations
• 12. Communication
• 13. Protecting and supporting whistleblowers
• 14. Persons implicated in a report
• 15. Outcomes
• 16. Disclosures and disputes
• 17. Recording and reporting
• 18. Training
• 19. Review
• Other Resources