Corporate integrity during rambling pandemic: Whistleblowing framework to help uncover misconduct, says EY

The COVID-19 pandemic introduces new challenges for organisations looking to build and maintain a robust integrity framework. Today, policies and procedures need to be reviewed through the lens of an increasingly dispersed and remote workforce. EY Global Integrity Report 2020 reveals nine in 10 respondents believing that the pandemic poses an increased risk to ethical business conduct at their organisations.

Is this moment of truth for corporate integrity?  
Organisations need to do more to locate and stop unethical behaviour and also to protect those that help do so. 
Whistleblowers – employees who expose behaviour inside their own organisation – play a crucial role in uncovering misconduct. This is just one reason why policies to protect whistleblowing have migrated out of obscurity to near the top of the agenda for many senior legal and compliance professionals. 

Data collected for EY Global Integrity Report 2020 found that the vast majority respondents – 94 percent of the nearly 3,000 companies surveyed – had at least one element of a robust whistleblowing procedure in place. 
The most common was a code of conduct for how employees should behave in business (47 percent), followed by regular training on relevant legal, regulatory or professional standards of behaviour (38 percent).

At a macro level, 53 percent of respondents, who had reported an issue, felt under pressure not to report. Thirty-nine percent of those surveyed said it had become easier to report concerns over the past three years.

 Despite this, one in five respondents is more concerned about the level of protection for whistleblowers than they were three years ago with less than one-third (27 percent) believing that they are offered more protection.
Organisations need to understand this process – a policy alone is not enough. With whistleblowing laws and rules becoming increasingly widespread, corporations around the world need to build and enhance their current procedures.

Fostering right environment
Ernst & Young Country Managing Partner Manil Jayesinghe said, “Integrating a whistleblowing policy into a firm’s culture and values in the longer term is important. 

Employees feel safe when there is a comprehensive culture of integrity inside the organisation and people know that the company is committed to these values.”

A critical related concept is the ability for a company to ‘listen down’ – to actively be able to receive input and feedback from layers below executive management. 

This helps foster an environment where employees feel comfortable ‘speaking up’ when they see things they believe go against the values of the company.

 Indeed, organisations should promote a culture that treats whistleblowing as a duty and responsibility where wrongdoing or unethical behaviour is occurring.

Ernst & Young Partner Hiranthi Fonseka said, “We have seen how whistleblowing programmes have benefited organisations, specially, over the last one and half years, when controls and processes were significantly overshadowed by the need to carry on business. Companies and their executives need to take responsibility for setting up the right environment so that whistleblowers can come forward.” 

Setting right tone
In conclusion, Fonseka mentioned, “The whistleblowing programmes form a key pillar of an organisation’s corporate governance framework and it is critical for companies to build ethical and humane processes to handle complaints.” 

She said by incorporating this as part of their agenda, organisations can ensure that their people don’t turn a blind eye to wrongdoing, are encouraged to speak up and are then rewarded, not penalised, for doing so. 

Ultimately, this will help them emerge stronger than their competitors, having retained top talent and attracted new customers even during turbulent times.  

A deep-seated cultural change indeed goes beyond lip service and minimum compliance. It takes time and effort for such cultural change. But the rewards are many, especially to preserve your business integrity amid and beyond the COVID-19 pandemic.