Practical guidance for directors on the importance of whistleblowing during the continually evolving COVID-19 crisis.

Why is whistleblowing relevant during the crisis?

The impacts of COVID-19 are continually evolving, so directors need up-to-date information gathered from a variety of sources and this should include information about whistleblowing.

Whistleblowing is always central to risk management, but it has increased importance when normal business practices are suspended. The insights provided by whistleblowers are crucial when past experience and usual presumptions cannot be relied upon. Whistleblowing highlights flaws, and it is unique in its ability to identify emerging risks and protect against reputational risks.

Getting whistleblowing right also allows companies to show respect towards their stakeholders, and to acknowledge the value of their stakeholders’ contributions and opinions.

How can directors help?

Directors should seek reassurance from their company that whistleblowing continues to be an active element of the company’s risk management.

Although confidentiality may prevent directors being told the exact nature of what has been reported by whistleblowers, there is nothing to stop directors asking general questions about how whistleblowing is functioning during the crisis.

It may be helpful for directors to receive anonymised information about whistleblowing more frequently than usual so that any trends in the number and nature of whistleblowing reports can be identified at the first opportunity.

What are the practical challenges?

Whistleblowing policies and procedures should be reviewed so that appropriate modifications are made, perhaps on a temporary basis. There are a number of difficult areas which boards should always take into consideration whenever they review a policy or procedure, however the current crisis adds a new lens. For example, the crisis may discourage potential whistleblowers because they may be more concerned than ever about putting their job at risk while the jobs market is slow, but reinforcing the reliability of confidentiality and anonymity measures may help ease their concerns. If any changes in policies and procedures are made (even if these are just temporary measures) then directors and all stakeholders who are eligible to make whistleblowing reports should be informed of the changes and why they are necessary.

Homeworking could be a real or perceived barrier for whistleblowers, and those accused by whistleblowers may feel particularly vulnerable if their usual support systems are disrupted, eg if they find it more difficult to speak to a trade union representative.

It may be challenging to conduct a timely but fair investigation if it isn’t possible to hold face-to-face interviews or access relevant documentation. Implementing changes arising from lessons learned from a whistleblowing report may also be more difficult or take longer.

It may be wise to be open about the fact that any investigation may take longer. Alternatively, it may be possible to hold virtual meetings with the whistleblower, any accused person and anybody else who can provide relevant information.

Some companies may find it helpful to appoint a Whistleblowers’ Champion, in addition to their existing whistleblowing framework. Such a position is already required by the Financial Conduct Authority for some financial institutions .Their role is to ensure and oversee the integrity, independence and effectiveness of the institutions’ policies and procedures on whistleblowing, including those policies and procedures intended to protect whistleblowers from being victimised. Other types of companies may find that under the current circumstances (and going forward) appointing a Whistleblowers’ Champion may encourage whistleblowers to come forward.

Difficult decisions for boards
Who can report: employees are a key group, but boards need to consider the potential for whistleblowing by suppliers, non-executive directors and ex-spouses.
What can be reported: the extent of legitimate interest in employees’ personal lives, and a comparison with what is a grievance.
Anonymity and confidentiality: whether both can be guaranteed regardless of the nature of the allegation or investigation, particularly in small companies.
Method of reporting: whether a third party supplier will be used for the receipt or investigation of whistleblowing reports.
Investigations: techniques may include interviewing witnesses, surveillance or entrapment. It may be not be possible to provide a definitive timetable for investigations, but there must be oversight which ensures that crucial decisions are never made by a single investigator in isolation, eg, the decisions around remedial action and whether to give a whistleblower feedback.
Remedial action: how and when action will be taken, taking into account matters such as how to investigate without revealing the whistleblower’s identity.
Feedback to whistleblowers: although feedback cannot be guaranteed, there should be a presumption that whistleblowers will be advised of the outcome of their report unless there is a good reason for this information to be withheld.
Other reporting: policies must not mislead about any ability or duty which employees have to report to other organisations, and companies with ‘speak up’ policies must differentiate them from formal whistleblowing.
Behaviours: how to encourage professionalism including whether victimisation of whistleblowers should lead to disciplinary action or bonuses being withheld.
Rights of accused: although the whistleblower may be anonymous, as far as possible natural justice should be respected, eg, through independent corroboration, a right of reply and confidentiality of the process.

What are the final steps to success?

Whether or not changes are made to whistleblowing policies and procedures, it is a good idea to remind stakeholders who are able to make whistleblowing reports that they are still able to so. This will help underline the continued importance of whistleblowing regardless of other operational changes arising from COVID-19.

Once the COVID-19 crisis subsides companies will want to learn lessons and continue what has gone well. Provided directors and companies take appropriate steps now, whistleblowing could be one of the success stories.

Where can I access more information?

ICAEW’s thought leadership paper how whistleblowing helps companies.