Our research reveals a quarter of middle market firms don’t have a formal process in place to handle whistleblowing. This compares to 33 per cent surveyed over two years ago, highlighting a rate of progress that RSM believes is too slow. In 2018 RSM found that only 53 per cent of middle market businesses researched had a helpline in place for employees to escalate their concerns – we are now seeing that figure at 64 per cent.
This could suggest that high profile and highly criticised cases of failed corporate governance and demonstrations of failed whistleblowing processes have raised awareness of its necessity.
In our securing your future publication, we have explored how critical transparency is to ensuring a sustainable, ethical and future proof culture and organisation. Effective mechanisms for escalating employee and stakeholder concerns has to be a part of this. If stakeholders, and crucially employees feel empowered to hold themselves and peers accountable for their behaviour – then Boards and senior leadership are much more able to build an organisation which is built on integrity and accurate business intelligence.
Whilst our research reveals that too many middle market businesses remain exposed to whistleblowing, probably more concerning is the relatively slow rate of progress in terms of improving the governance and supporting processes in this key area.
A robust and transparent protocol that ensures whistleblowing is managed is critical in ensuring a sustainable, ethical and future proof culture and organisation. Effective mechanisms for escalating employee and stakeholder concerns is a vital part of this. If stakeholders, and crucially employees feel empowered to hold themselves and peers accountable for their behaviour – then Boards and senior leadership are much more able to build an organisation which is built on integrity.
It is important to remember that just having a helpline in place is not enough. Organisations and Boards must ensure that there are accompanying policies and awareness programmes to support the mechanism. This not only embeds best practice and awareness across the workforce but helps senior leadership to respond appropriately. Employees must be made to feel safe in their workplace and so responses to official concerns must follow the appropriate, independent steps. This will help employees feel like they will not be persecuted or blamed for speaking up.
Worryingly however, in considering the need to accompany escalation mechanisms with policies and education – 24 per cent of the same organisations who claimed to have a helpline, do not have a policy to accompany it. This shows us that perhaps organisations are taking good first steps, but they are not properly delivering a robust approach to effective corporate governance. This conclusion is supported by 25 per cent of organisations admitting they have no formal process to handling whistleblowing.
Organisations who have taken initial steps, or haven’t considered whistleblowing thoroughly should:
|①||Appoint a transparency champion.|
|②||Establish a regular training programme for all Board members and staff.|
|③||Draft and publicise a whistleblowing policy and reporting mechanisms.|
|④||Ensure there is an independent investigation process should it be needed.|
|⑤||Roll out a whistleblowing helpline that is well publicised and accessed.|
Over and above this, once the right measure have been put in place – Boards will need to gain continuous assurance that the process is working, and is being used properly by the business. This is not a one time compliance approach – it should be continually monitored.
If you would like to talk in more detail about how you should be ensuring effective corporate governance through robust whistleblowing measures please contact Tim Merritt.