The main obstacle companies face with detecting unethical behaviour is employees’ natural reluctance to talk about what they have seen. As such, says Professor Chris Cowton, senior figures should start by using informal language to assure staff that they are receptive.

“We could say something like: ‘Put your hand up if you’ve got a concern’,” says Cowton, architect and main writer of ICAEW’s Ethics CPD Course. “That gets us away from the idea of making a ‘formal report’, which could strike the member of staff as quite a daunting, bureaucratic process.”

Cowton notes that many people who suspect unethical behaviour tend to think, ‘I don’t want to point the finger’. In that case, the message from senior management should be that it’s not a question of pointing the finger. “You’re not the prosecution. You’re not the one who’s going to have to make a case here. You have a worry and you must feel free to discuss it.”

Sound judgement

It takes a lot of courage to raise any sort of issue, says Chris Ellis, CFO of customer experience specialists Silverbullet and a member of ICAEW’s Ethics Standards Committee. “If someone has the courage to raise an issue with you in your capacity as CFO then, irrespective of the nature of the matter, you must take action to ensure that it is investigated properly.”

Ellis stresses that being CFO requires sound judgement on a daily basis. In the context of handling a report of unethical behaviour, that means ensuring that you would never restrict any evaluation of the issue to just yourself. 

In a large organisation with sophisticated processes, that would typically entail referring the employee who has raised the concern to the dedicated whistleblowing or speak-up system. In a smaller organisation without that facility, it would be vital to involve the HR partner, or another experienced party, at the earliest possible stage.

“Referring to the appropriate resources within the organisation is one of the strongest ways to ensure that the concern is investigated properly and fully, and that any conclusions drawn and actions taken are properly applied and managed, too,” he says.

On the question of how much detail the CFO should hear about the concern at hand, Ellis suggests that this is dictated by the circumstances under which the report is being raised and the nature of the complaint. For example, a younger, less experienced member of staff may want to spend time talking about the issue, partly because they need to get it off their chest and partly because they may not be familiar with certain formalities within the business.

“However, it would be important to stress that, even though you are happy to hear them out, you’re unable to take any formal action yourself and would therefore urge the employee to go through all the details with either the speak-up service or the HR partner.”

Cowton agrees that, in the first instance, the CFO’s engagement with the concern could provide the person who has brought it with a welcome pressure valve. “The employee won’t necessarily have all their ducks in a row,” he says. “There will be scope to probe what they’re divulging and ask questions, which is inevitable because you may have positive or negative biases about the individual whose behaviour is at issue. You may even be tempted to say, ‘I’m not sure about that’. But remember: you’re not meant to be sure – fundamentally, you’re just meant to hear it.”

He points out that if you do have a speak-up process, but someone comes to you anyway, that’s great. It’s a sign of a healthy organisational culture.

Zero tolerance

In Cowton’s view, a formal speak-up process comes into its own in two important ways. First, it places control over anonymity squarely in the hands of the employee who is raising the issue. For example, if the process is run by an external provider, their anonymity would typically be strengthened. 

As such, while the service would not completely eliminate the risk of retaliation – fear of which is a major barrier to speaking up – it would greatly reduce that risk. However, for the employee, this would still be a matter of choice. They may in fact be happy to share their personal details with the external provider and, therefore other parties within the organisation, to assist any subsequent probe.

“Another compelling reason to encourage members of staff to use the speak-up process is that you can learn from it,” he says. “It becomes a dataset, with metrics and patterns. When you have some rich material, you can use it to support an ethics-based culture by creating dilemmas – tweaked, disguised and anonymised – for use in training and communications.”

When considering the aftercare a CFO should provide to an employee who has raised a concern, Cowton advises checking in with them three-to-six months later to find out how they are doing. The approach could be along the lines of: “I’m really glad you brought that to my attention. I know a lot of people wouldn’t do that. How has everything been since then?”

If the CFO discovers that the person who came to them has left the company, Cowton says, they should find out whether there was an exit interview and what the former employee’s feedback may reveal about how the speak-up process could be improved.

“As a senior manager, the CFO should publicly support speaking up and a zero-tolerance policy on retaliation,” he says. “They could also help with gathering data, which can play a vital role in instilling staff confidence in the process. A good example is aerospace firm Northrop Grumman. If you look at the ethics section of its annual sustainability report, it will say something like: ‘We had X many speak-up cases this year. These ones were either fully or partially upheld and, as a result, 20 people were dismissed and 100 were retrained.

“That reassures not just the people who have spoken up, but those who haven’t. They will understand that, while the process may not be perfect, actions happen because of it.”