Subscribe to our Newsletter to receive the latest updates on our content. By tapping the “Subscribe” button you will be redirected to subscription page. Subscription is free.
The literal meaning of ‘whistleblowing’ refers to the act of raising the alarm, to alert others about a dangerous situation.
In a corporate context, it refers to the act of reporting urgent concerns to persons within an organisation who can act upon them. Therefore, it is imperative that whistleblowing reports be channelled to the right person, who is normally someone with the authority to intervene appropriately and decide how to escalate or resolve the reported issue. The concerns raised by a whistleblower would be those which, due to sensitivity, magnitude or urgency, cannot be reported through the ordinary channels, and which risk backlash upon the person reporting them. Such concerns include fraud, abuse, harassment, undisclosed conflict of interest, corruption and related matters.
The importance of effective whistleblowing can be seen in two recent cases. The first one involves an international NGO which experienced a huge decline in contributions and heightened government oversight following reports of improper conduct by the NGO’s management during its response to a humanitarian crisis. The second involves a regional bank which suddenly went under and later investigations revealed extensive mismanagement by some executives. In both cases, it was found that key insiders were aware of potential problems but did not report these for action.
Having a well-structured whistleblowing service in place could potentially have resulted in these matters being addressed before they became critical. It is therefore prudent for the leadership of a firm to put in place a well-structured and effective whistleblowing platform to enable the timely discovery of and response to issues before they spiral out of control.
Employees often know of ongoing wrongs within an organisation, but may not know how to channel their concerns, or may not have a way to raise concerns without being identified and penalised.
External parties such as suppliers, customers and NGO beneficiaries may also be the victims of wrongdoing hence may have helpful information about the involvement of people within the organisation (such as in cases of bribery and extortion).
Ultimately, whistleblowing only works if:
Due to employee involvement in the day-to-day operations of the organisation, and given their constant interaction with each other, they will typically become aware of any irregular or illegal activity before the same is discovered through any formal process. Their subsequent action following such discovery largely depends on whether an organisation has a formal channel that allows the employees to make such disclosure to senior management, without fear of consequences, the belief that nothing will be done or that it will not make a difference whether or not they report.
Whistleblowing services facilitate such disclose and further provide the below benefits to the organisation:
For NGOs, such reporting may help avoid negative publicity that could potentially impact funding.
Overall, employees will comfortably engage in whistleblowing when they understand their role in making the organisation a success and it is made clear that whistleblowing works.
For more information on our whistleblowing service and how it can assist in your organisation, click here.
Adili Trust, an affiliate of Anjarwalla & Khanna and A&K Forensics, works with clients to respond to concerns about financial crime. Should you have any questions regarding whistleblowing, please contact:
The content of this alert is intended to be of general use only and should not be relied upon without seeking specific legal advice on any matter.