Protect your business by protecting your whistle-blowers

International crimes such as money laundering to financial crimes that affect only one business, such as petty cash fraud, can be managed better if whistle-blowers were more open and willing to step forward. For this to happen, though, company leadership has a responsibility to ensure whistle-blowers are safe.

Recent news stories highlighted the role whistle-blowers played in curbing international financial crimes, bringing to light alleged financial mismanagement and State capture, and the effects of not addressing whistle-blowers’ concerns on listed companies’ value.

In South Africa, we have world-class pieces of anti-bribery and anti-corruption legislation, but the issue is enforcement, where a lot more can be done. This is not only the case for enforcement agencies such as the SA Police Service but also an issue for businesses, individuals, and communities to address.

Globally, we are seeing a move to encourage whistle-blowers, since when issues of corruption, fraud, and bribery come to light, it is because someone had the courage to speak out. Sadly, this is often done in the face of tremendous pressure and with fear of what the repercussions might be for the whistle-blower. This is where both the law and businesses can play a role to encourage whistle-blowers to tell their stories, in a supportive and protective environment.

A key piece of local legislation is the Protected Disclosures Act, which has governed disclosures since 2000. In terms of the Act, organisations are required to implement measures to facilitate whistle-blowing. In addition, organisations such as Corruption Watch, encourage whistle-blowing and have created platforms where individuals can report corruption.

After 21 years, a number of best practices have emerged that business leaders can follow, which should be part of every company’s basic HR policies and shared with employees. At a practical level, one of the key aspects is that the tone has to be set at the top of the organisation.

Business leaders have to focus on creating an ethical culture, where whistle-blowers are taken seriously. This includes the company being open to showing how it deals with allegations, how it investigates whistle-blowers’ complaints, and whether it takes decisive action against guilty parties.

There also needs to be consistency in implementation when whistle-blowers do come forward, as this has been shown to have the best outcomes that encourage whistle-blowers, in public and private organisations.

While companies may balk at spending money on whistle-blowing systems in the current economic environment, organisations such as Corruption Watch encourage whistle-blowing and have created platforms where individuals can report corruption.

Encouraging whistle-blowers need not cost your company money - in fact, it will save your bottomline in the long run. I’ve done numerous investigations where we’ve uncovered millions of rands of fraud because someone in the organisation has had the courage to speak up, the leadership has investigated, the criminals have been brought to book and the financial bleeding has been staunched.