The perils of not having a secure and anonymous whistleblower reporting channel

With cultural shifts and an increase in legal protections, whistleblowing disclosures are on the rise. But for any business that wants a channel to flag unethical behaviour, the focus should be on the quality of the tech: your reporting software will only work for you, if it works for your people.

‍

High profile cases, social movements and better safeguarding laws have done a lot to raise the profile of whistleblowing over the last decade. But in order to highlight potential issues, is the platform you provide your workforce up to the job?

‍

Why your whistleblowing channel might not be helping your workforce

‍

If your business is experiencing problems with your whistleblowing system, it’s likely due to issues with its design, your company culture or communication problems. In our experience, it’s usually down to the following:

‍

It’s not anonymous

A huge problem in whistleblowing is the fear of speaking out. An employee may feel the need to stay quiet on an issue if they feel their safety or job prospects could be compromised. Which is why anonymity is critical, and the ability to facelessly flag a problem is fundamental to your system.

‍

By providing this level of protection, you are demonstrating a commitment to ethical practices, employee wellbeing and compliance to whistleblowing protection laws.

‍

It’s not secure 

Whistleblowing can involve the handling of highly sensitive information, and the identity of the whistleblowing and the subjects involved must be protected.

‍

Breaches or weak systems can expose whistleblowers, and lead to data being misused or extorted. End-to-end security measures, robust cybersecurity practices and a strong audit trail are non-negotiables for an effective reporting channel.

‍

The dispute handling isn’t efficient 

A poorly designed reporting process will put off users. Whether it’s slow, complex, or unclear, it’s your responsibility to research how your employees find it. 

‍

Simply the process by using software that makes reporting quick and accessible. Provide multiple reporting options - via phone, messaging portal or email that allows anonymous submissions. And ensure the resolution process is handled professionally and legally.

‍

Your whistleblowing policy needs work

Many organisations have policies that were drafted years ago. Since then, the business has changed, evolved and processes developed. Does your policy reflect your business as it is today? 

‍

Evaluate your whistleblowing policy regularly and ensure that your workforce is kept abreast of changes, enhancements and new amendments to it. 

‍

People aren’t aware of the service

Implementing a whistleblowing channel isn’t a box ticking exercise. Its presence needs to be highlighted as often as possible, particularly in a new hire’s onboarding. 

‍

Educate your new employees on the existence, purpose and process of the channel - and also what typical issues can look like. 

‍

The channel is not separate from management 

Misconduct can happen in every strata of the organisation. However, if employees witness unethical behaviour from senior management, they are less inclined to report it if disclosures are handled within the same team.

‍

To avoid this conflict of interest, disputes need to be raised and handled by a team separate from the operations of the business. Either by a third party or a department separate from the main hierarchy.

‍

Your workplace has a culture of silence

Culture or sub-culture issues typically emerge, such as a bystander culture, where people accept poor behaviour and don’t challenge it. It can turn into an attitude of ‘but that’s just how Bill is, he’s always been like that…’ 

‍

Often, there will be staff inside the organisation that won’t ethically agree with what they see and know something is wrong, but some of the above cultural norms create a culture of silence and subsequently matters go unreported. 

‍

Fostering a culture of openness can change this, where speaking up is encouraged and valued. Train your leadership to model ethical behaviour and support employees who raise legitimate concerns. 

‍

Having impartial reporting channels also alleviates the above concerns by reporters. The case study below is a great example of this type of scenario.

Case Study: how an unclear whistleblowing policy enabled $2.5m fraud activity

‍

We recently worked on a case where Organisation A was delivering a large infrastructure program. 

‍

As part of the exercise, a senior manager was responsible for supplier engagement and onboarding vendors to help deliver the program. 

‍

Behind the scenes, the senior manager was colluding with some of the vendors, by allowing them to inflate invoices for goods and services delivered. 

‍

This type of procurement fraud is typically wrapped up and concealed in the subsequent invoice process with the senior manager approving invoices, and price variations to invoices, and so on.

‍

The inflated amount was shared between the senior manager and the vendor. This is a common type of fraud and is sometimes referred to as a kickback or bribe.

‍

Emboldened by the ruse, the senior manager and one of the vendors started to charge for goods and services not delivered at all - a crime known as dummy invoice fraud. 

‍

This was what brought them unstuck. An anonymous tip off was sent to the regulator directly, and led to an independent investigation.

‍

The regulator commenced an investigation, and when a deep dive of the invoices was undertaken, it was discovered that some of the projects on the fake invoices never existed. The approval footprint and the invoice went back to the senior manager and supplier, which led to criminal proceedings and termination of both parties from the organisation. 

‍

What also transpired during the investigation, when other employees were interviewed, was that they had concerns about the senior managers’ conduct but did not know where or who to report to. 

‍

People were very nervous about going above him because of his seniority and perceived power. 

‍

There were also concerns about going to other people within the business, because of the ‘don’t shoot the messenger’ view and the power imbalance and lack of impartiality would leave them too much at risk. The result was silence, and that’s how a large fraud was able to take place.

‍

There was not a secure, independent, anonymous reporting channel in place. The fraud was close to $2.5 million by the time the regulator concluded their investigation. It is highly likely an earlier, anonymous tip off would have saved the business a significant amount of money, and stopped the fraud earlier if staff had spoken up earlier. 

‍

How to implement a usable, but secure, whistleblowing system in your organisation

‍

This case study demonstrates that both internal and external reporting channels are needed, including an online, secure, anonymous reporting channel. Ideally, this would be separated from line management, so employees feel more comfortable and confident in raising issues

‍

At Veremark, we offer an end-to-end secure solution that focuses on well-designed online reporting - which helps our clients collect good quality information - and effective resolution through a best practice policy framework. If you would like to learn more, head here. 

‍