Whistleblowing: why it’s good for business

If something is going wrong in your company, wouldn’t it be better to know sooner rather than later?
Whistle blowers might have a negative reputation in business, but in reality, they can be a great asset, helping to flag up issues before they turn into full-blown disasters.

An effective whistleblowing policy and practices in place will encourage employees to come forward and deter potential wrongdoers from breaking rules in the first place.

These policies aren’t just for the big names, either – a new international standard, BS ISO 37002:2021, sets out a framework for whistleblowing that can be adapted to organizations of any size. It provides a framework for establishing a clear and robust whistleblowing system within your organization.

One in three UK companies without a whistleblowing system are planning to discuss or introduce one in the next 12 months - will you be one of them?

What can a whistleblowing policy do for your business?

Businesses are built on relationships of trust and respect. A report of wrongdoing can be stressful to manage and investigate because the conflict can cause internal tension and suspicion. Having a pre-existing framework for receiving, assessing and addressing reports of wrongdoing will help to minimize disruption and ensure the incident is dealt with impartially and professionally.

Very often, junior staff know about wrongdoing long before it is noticed by senior managers but keep quiet for fear of detriment to their careers. A whistleblowing policy helps to encourage workers at all levels to report wrongdoing which can help ensure early reporting at all levels.

Good governance and transparency

Adopting a whistleblowing policy can also have a deterrent effect on employees. Knowing that an organization has a culture of transparency and that colleagues are encouraged to report wrongdoing can help to prevent poor conduct and rule breaking. Having a policy in place also demonstrates your organization’s commitment to principles of good governance and transparency.

A 2019 survey found that companies that invest in a whistleblowing system experience multiple benefits, including 60% less financial loss, improved employee understanding of compliance, improved ethical image, better processes and promotion of good conduct.

Is whistleblowing only for large corporations?

The best-known cases of whistleblowing involve big business and state institutions. For many , whistleblowing conjures up names like Julian Assange and Edward Snowden. More recently, Extinction Rebellion made news by inviting workers from Shell, Exxon, HSBC and HS2 to blow the whistle on unsustainable practices.

Nor are the headlines made by the private sector. NHS Highland expects to pay out £3.4 million in settlements in response to a review into bullying allegations at the Health Trust. This follows a Scottish government review in 2018 after whistle blowers reported hundreds of complaints and described the culture at the Trust as “bullying”.

While allegations against large organizations may attract the most press coverage, whistleblowing also impacts smaller organizations. Issues such as bullying managers, non-compliance with regulation, unsafe practices or corruption can prompt employees to speak out.

Growing awareness after #MeToo

In the wake of the #MeToo movement, there is heightened awareness about the importance of listening to reports of wrongdoing and creating a supportive environment to reassure would-be whistle blowers. There is growing interest in external whistleblowing services - the industry is now valued at $4.5bn globally.

Use of whistleblowing systems increased 12% between 2012 and 2020. UK companies said the top motivators for using a whistleblowing system were strengthening reputation; being seen as ethical and moral; having an obligation to employees; and meeting an industry benchmark.

Turning the tide

Usage is currently concentrated in larger companies - 73% of large businesses in the UK use whistleblowing systems compared to just 51% of SMEs but the tide is turning.

The pandemic has also influenced whistleblowing. Overall reporting fell, perhaps as homeworking reduced the likelihood of colleagues witnessing malpractice in the workplace or experiencing harassment. On the other hand, in certain sectors such as health and social care, there were high levels of whistleblowing, for example from care workers expected to make do with inadequate personal protective equipment. ]

Remote working makes it all the more important to have a clear reporting framework in place to avoid employees feeling isolated and alone.

The UK law on whistleblowing

The legal definition of whistleblowing is set out in the Public Interest Disclosure Act 1988. as “a disclosure made in the public interest of information that falls within certain categories of failure, such as a criminal offence or breach of a legal obligation. Only certain types of worker fall within the protection and the disclosed information must have been concealed (or intended to be concealed)”.

In law, the whistleblower is granted protection against detriment such as harassment, dismissal, or lack of promotion. Even with these protections, individuals who blow the whistle on their employer often pay a heavy price in terms of career progression, relationships with colleagues and unwelcome publicity.

A new EU law on whistleblowing (Directive 2019/1937/EU) is due to come into force in December 2021. The UK is required to maintain equivalent levels of employment protection under the terms of the EU withdrawal agreement, but the UK government has confirmed that there will be no change to domestic legislation in the short term. A 2020 All-Party Parliamentary Group Report called for changes such as widening the scope of protected individuals, and requiring employers to comply with standards and introduce internal procedures.

Creating a speak-up culture through standards

Built around the principles of trust, impartiality and protection, the new international standard, ISO 37002:2021 provides guidance on how to establish, implement and maintain an effective whistleblowing system.

Prof. Wim Vandekerckhove, Convener of the ISO/TC 309 - Governance working group on whistleblowing said: “Good governance and transparency require that staff can feel confident reporting any concerns of wrongdoing without fear of repercussions. Therefore, it is crucial to manage this process effectively.

This new standard helps to do that by providing guidance on what a robust and effective whistleblowing management system looks like and how to operate it in the best possible way.”

The ISO standard is available from the new BSI shop. You can also find more advice and information on whistleblowing from the charity Protect.