Employees should feel empowered to speak up when they see something wrong, but creating that culture can be challenging for multinational organizations.
Employers are faced with more compliance than in years past. In 2015 alone, more than 50,000 regulatory and compliance updates affected businesses around the globe, according to Thomson Reuters. Organizations are contributing more time and resources to compliance activities, while at the same time promoting a "corporate culture of integrity," as noted by Thomson Reuters.
Part of this compliance culture requires employees to speak up if they see any wrongdoing in the workplace. However, employees likely want whistleblower protection for speaking up, either through laws or internal policies. However, laws can differ from country to country, making internal policies and procedures complex and burdensome for multijurisdictional organizations.
Here's what multijurisdictional businesses can do to manage whistleblowing activities while creating a "corporate culture of integrity."
Global Whistleblower Protections
More than 30 countries have implemented whistleblowing protections, according to the law firm DLA Piper. However, these protections vary country to country. While some countries — such as the U.S., the U.K., Japan and Canada — have express protections under law, other countries — such as Hong Kong and the United Arab Emirates — offer very little in the way of whistleblower legislation. France, Germany and the Netherlands, for example, offer limited protections that can be found through other general employment and criminal laws, but not standalone whistleblowing legislation.
In the United States, whistleblowing protections have long existed for reporting safety concerns, such as those enforced by OSHA. However, employee protections in the financial sector where formalized in 2002 with the Sarbanes-Oxley Act. Other legislative measures protecting whistleblowers have passed since 2002, including the Foreign Corrupt Practices Act and the Wall Street Reform and Consumer Protection Act (Dodd Frank). Additionally, the U.S. government or other regulatory agencies offer financial incentives to individuals reporting compliance issues. As whistleblower protection — such as that offered through incentives — increases, so does whistleblowing activity. In fact, in 2015, according to the U.S Securities and Exchange Commission (SEC), the SEC's whistleblower program awarded more than $57 million to whistleblowers — more than all previous years combined.
Not all other countries offer such rewards, either because of lack of regulatory provisions or cultural preferences, according to DLA Piper. For example, the U.K., Germany, France and Japan do not offer any governmental incentives to employees disclosing potential wrongdoing, although each of these countries offer protection against retaliation for such disclosures. Multijurisdictional employers should understand the legal differences in each country, as well as the cultural impact on whistleblowing, as culture as well as law impacts the creation of a compliance-driven culture.
Creating a Culture That Allows Employees to Speak Up
Establishing a culture where employees feel comfortable speaking up when something is wrong can help reduce risk by addressing compliance issues early and internally, before the government or a court catches wind of such potential wrongdoing. Workforce reports that employers with effective compliance programs show an 88 percent increase in reporting issues to management. This increase in reporting can allow organizations to address these issues promptly — and internally — while showing a commitment to their employees.
Organizations could implement hotlines, where employees can anonymously call to report suspicious activity, or establish robust policies and procedures, guiding employees and management during whistleblowing incidents. In some countries, these tools are required under law. However, employers must understand — required or not — that these are tools or guidelines. What an employer does with the information received through these tools, or under certain guidelines, can be crucial in establishing a culture where employees feel confident to speak up. "Leaders who take employee concerns seriously and follow through send a strong message about integrity," notes Workforce.
To create this culture, organizations should:
- Encourage early reporting of concerns
- Provide different methods for reporting concerns
- Train managers and supervisors on how to respond to such concerns
- Focus on the incident reported, not on the employee (or employees) reporting the incident
- Investigate the incident thoroughly
- Share the results of the investigation
When creating an ethically astute culture, organizations must understand and implement these basic principles, while tailoring them accordingly to local laws and cultures. Understanding — and implementing — these differences across locations can assist organizations in providing an ethically compliant workplace while potentially reducing legal and reputational risks.
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