How SMEs can tackle wrongdoing

Reporting misconduct of this kind to a line manager or HR representative, for example, can be viewed as ‘everyday whistleblowing’. Other relatively commonplace examples of whistleblowing could include making a suspicious activity report (SAR) to the National Crime Agency if one suspects a client is involved in money laundering, or making a report of malpractice to a professional or regulatory body.

The 2012 Institute of Business Ethics (IBE) survey of employee views of ethics at work noted, however, that whilst a fifth of British employees were aware of misconduct in their organisation in the previous year, only a half say they had reported it. The reasons given for not raising their concerns were attitudes of indifference (“it’s none of my business”) or the belief that no corrective action would be taken. This view is supported by a survey of 1000 callers to the Public Concern at Work whistleblowing advice line, 60% of whom did not report any response from management (negative or positive) after having raised their concerns.

Therefore, there are barriers to everyday whistleblowing, albeit less dramatic than repercussions to whistleblowing on serious wrongdoing, which can include dismissal, breaking of gagging clauses and even imprisonment. However, no matter the type of misconduct in question, it is nevertheless essential that whistleblowers voices are heard and they do not feel pressure to keep their concerns to themselves.

For an SME the challenge can be helping whistleblowers overcome this pressure. A good first port of call is having a whistleblowing policy in place. The policy should set out, both for employer and employee, the preferred procedure for whistleblowing and how concerns should be raised and dealt with. It might name a whistleblowing officer within the company who employees can go to with their concerns, and may also identify the preferred route for whistleblowing externally if a concern has not been dealt with sufficiently internally within the organisation.

The National Audit Office released a guide to ‘Making a Whistleblowing Policy Work’ in March 2014. This guide notes “having a policy in place is only the first step. For whistleblowing to work, the culture of an organisation needs to support and enable the systems, structures and behaviours through which it can work effectively.” Some of the top tips outlined in the guide include:

• Foster a culture of openness:
o Ensure all employees are aware of any central hotline or reporting sources.
o Inform stakeholders of the relevant policies and procedures.
o Give all staff relevant training on the whistleblowing policy.

• Tone at the top:
o Ensure managers take a lead on the whistleblowing policy to show that concerns will be taken seriously.

• Be flexible:
o Review policies and procedures on a regular basis.

• Learn lessons:
o Identify any trends in the concerns that are being raised.
o Collect, analyse and share lessons that have been learned and common risks.
o Enable employees to see the results of any cases which have been investigated
o Target areas of risk, such where there may be weaknesses in control or where staff need additional training.

Following these top tips can ensure whistleblowing concerns are raised and dealt with correctly, especially for SMEs which may not have the necessary guidelines on how to tackle wrongdoing.

Rebecca Doodson is the Senior Conduct & Compliance Officer at the Association of Accounting Technicians

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