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Encourage Whistleblowing To Stamp Out Corporate Fraud

More often than not, whistleblowers are just trying to do the right thing. Here's why you should encourage them.

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More often than not, whistleblowers are just trying to do the right thing. Here's why you should encourage them.

Opinions

Encourage Whistleblowing To Stamp Out Corporate Fraud

More often than not, whistleblowers are just trying to do the right thing. Here's why you should encourage them.

Share this article

Deciding to report fraudulent behaviour in the workplace is not a decision to be taken lightly. The employee who does report it faces possible alienation from fellow colleagues, and may worry about the effect that any involvement may have on their professional career and reputation. Often, many turn a ‘blind eye’ in favour of a quiet life.

In fact, the UK suffers heavily at the hands of corporate fraud. According to the latest global report by risk consultants Kroll, we are ranked second (only below Colombia) for fraudulent incidents, with theft of physical assets and misappropriation of funds being the main culprits.

While these are reported incidents, and will have been actioned upon, there is little indication as to what goes unreported. Without having definite numbers of those cases which may slip through the cracks, these statistics indicate a corporate fraud epidemic happening across numerous sectors.

However, by taking right steps from an early stage, employers can begin to root out incidents within their business and prevent them from causing irreparable damage.

What is ‘Whistleblowing’?

Whistleblowing is a term used to refer to people, often within a workplace, who expose information or activities that are deemed illegal or unethical. Whether an incident has taken place, is about to, or you think it will in the future, it is in the public interest for it to be reported and dealt with properly.

Whistleblowers are protected by the Public Interest Disclosure Act 1998, and as such are immune from any repercussions so long as they are a ‘worker’ within the UK.

What should you ‘blow the whistle’ for?

·         If someone has committed a criminal offence

·         When someone’s health and safety is in danger

·         When the environment is at risk of damage

·         When a miscarriage of justice occurs

·         If the company has broken the law

·         If you believe someone is covering up some form of wrongdoing

Encourage an open-door policy

Implementing a culture of vigilance within the workplace is paramount if you are to root out any criminal activity. Communication is vital in any aspect of a business, even more so where wrongdoing is concerned. As an employer, ensure that you stand on an even footing with your staff. This means that you can discuss any worries, concerns or troubles with each other.

Honest employees are a business’ best tool in the fight against corporate fraud, and senior management should be aiming to educate their staff on how fraud affects them, and how individuals can take action.

censoring ideas

Honest people are an asset, so don't censor them

Whistleblowing has been portrayed in a negative light over the years, but thankfully that reputation is starting to change. People are starting to see whistleblowing for what it is; an honest way for companies to go about their business, and to ensure that transparency is key in everything they do.

Encouraging this kind of transparency will be a great step in the right direction - it will also improve the general relationships you hold with staff.

When you consider the kinds of complex, multi-jurisdictional cases that we handle, a little transparency is just a minor improvement for a business to make – yet, it makes a huge difference when encouraging whistleblowers.

Lead by example

It’s little use implementing these policies if a member of senior management isn’t carrying them out. By reinforcing the importance of whistleblowing practices, you will make great progress in minimising workplace crime. The key here; lead by example.

This also includes resources, too. If you offer readily-available resources and information to your employees, vigilance will never be too far from their mind.

As damaging as a criminal record may be for the perpetrator, neglecting to report a crime can result in irreparable consequences for the business if the wrongdoings are uncovered later.

As we said earlier, it is imperative for businesses to implement a positive and encouraging whistleblowing policy. If they do not, the repercussions could be huge.

As damaging as a criminal record may be for the perpetrator, neglecting to report a crime can result in irreparable consequences for the business if the wrongdoings are uncovered later.

An investigation by the Serious Fraud Office (SFO) can have monumental repercussions on the business, not to mention the reputations of various CEO’s and Financial Directors. Corporate fraud even poses a threat to FTSE 100 companies.

corruption

An investigation could land you in hot water

What should you do if someone witnesses wrongdoing?

There has been, in the past, an element of stigma surrounding the act of whistleblowing; this attitude of ‘telling on your colleagues’ has to be eradicated. With clear, actionable policies you can inform employees on how best to report an incident.

The matter of confidentiality is, of course, a worry for many whistleblowers. Some opt for complete anonymity, which has its merits. Depending on the gravity of the incident, however, you may have to disclose your full identity at a later stage should the matter progress.

Where many businesses fail is the reinforcement of policies they already have in place. No employer likes to consider the likelihood of criminal, fraudulent activity within their workplace, and for such reasons, regular training on whistleblowing is neglected.

It works on two levels; the encouragement of a positive and transparent whistleblowing policy reassures those who may, at some point, witness wrongdoing. It also makes those tempted by fraudulent activity aware that you enforce a zero-tolerance policy.

Remember that reinforcement is vital: train your employers and make sure they are familiar with the processes and policies you put in place. With the above advice in tow, you can prevent corporate fraud within the workplace before it can ever rear its head. It’s all about training, reinforcement and employee transparency.

To aid senior managers, we have produced an in-depth guide on how businesses can establish whistleblowing processes, and ensure it is done correctly.

Aziz Rahman is senior partner at corporate fraud specialists Rahman Ravelli. You can read his guide in its entirety here.

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Encourage Whistleblowing To Stamp Out Corporate Fraud

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