3.13 Whistle Blowing

At the heart of any "Whistle-blower" policy is the protection of an organization’s reputation and good standing. As a result of many recent spectacular business scandals it is apparent that organizations need to stress the importance of honesty and cultivate a culture that underscores ethical behaviour. Accordingly, any organization would be wise to formalize a framework that establishes expectations for ethical behaviour in order to preserve the integrity of the particular entity.

Every employee should be encouraged to report any incident involving, wrongful, harmful, illegal or unethical actions or communications. The organization should encourage "reporters" to discuss such situations privately with someone with whom they have established a comfort level. This individual will hopefully be a Supervisor, Manager or Officer of the organization.

Organizations may wish to consider the appointment of an ombudsperson or perhaps an Independent Director of the Board to whom such reports could be made, especially if the "reporter" is fearful of retribution or retaliation. The arms-length relationship must be built on trust wherein there is a guarantee that, under no circumstances, will the identity of the "reporter" or "accuser" be revealed.

In a larger context everyone in the organization must know that retaliation in any form is unacceptable and will result in disciplinary action, up to and including termination.

The Whistle-blower policy should detail the steps that any reporter should follow if they believe that there is an ethical problem which needs to be exposed and corrected. The process for the reporter, and the actions taken by the company in response need to be clearly explained and widely disseminated. This will reduce the fear which comes from uncertainty about the process and its consequences. The draft policy must be reviewed and approved by the Board.

Importantly, the policy must be implemented in a company meeting with the full support of the management team, CEO and Board. The Chairman or another director should be at the meeting to launch the plan to demonstrate the highest level of commitment to the policy and process.