Changing perceptions

Numerous corporate scandals in the United States and elsewhere since the turn of the century have resulted in a growing distrust of corporate management. This change has brought with it a new perception of the importance of whistleblowing. The public perception is that, if whistleblower concerns had been heeded, some of the recent corporate disasters could have been avoided, and that in order to prevent future misconduct, whistleblowers should be encouraged to come forward and should be protected from retaliation. This increasing recognition that whistleblowers can play a critical role in disclosing corporate, as well as governmental, misconduct has also led to considerable legislative activity in many countries designed to protect whistleblowers and to encourage them to raise concerns.

Implications for companies: encouraging internal whistleblowers

In this new environment, companies have come to recognize that whistleblowers are more likely to come forward. If whistleblowers face a hostile internal environment, the whistleblower may go public to regulators, prosecutors, union management or the media. Thus, the prudent course for management is to establish a positive climate for whistleblowers that encourages them to report internally without fear of retribution.

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An internal whistleblowing system has major advantages for an enterprise. It usually gives it the opportunity to address the problem and take corrective and other remedial measures and thereby avoid the adverse publicity, investigation and prosecution that usually follow “after-the-fact” external whistleblowing. If the whistleblower reports early enough, when the problem is still in the planning stage– and ideally that will happen if the company encourages whistleblowers – this should allow the company to prevent bribery or other wrongdoing from taking place. Even if the company finds out about a problem too late to prevent it from happening, it will still be in a position to take disciplinary and other remedial measures designed to prevent a recurrence. That will also put the company in a better position to deal with the authorities and the media.

From the employee’s standpoint, if the company deals responsibly with the issues disclosed and provides meaningful protection and support, a good relationship can likely be maintained between the company and the whistleblower. This is seldom the case when the whistleblowing is external.

External whistleblowing can be very detrimental to a company, often leading to investigation and prosecution, resulting in bad publicity, the imposition of fines and possibly jail terms for executives and employees. It is also usually very detrimental to the whistleblower, severely impairing his or her ongoing relationship with the company and other employees. Frequently, it leads to the whistleblower deciding to leave the company (even if protected by statute) and seeking other employment, which may be difficult to find. Having an internal reporting system in place does not eliminate, but certainly reduces, the risk that an employee will blow the whistle outside the company.

It is important to recognize that a whistleblowing system inevitably raises tensions. For the whistleblower there may be conflicting feelings of loyalty towards fellow employees and a sense of obligation to broader corporate interests, as well as to the overall public interest. Potential whistleblowers are likely to be in a very sensitive and potentially precarious position vis-à-vis those whose conduct they criticize. They are often harassed or ostracized by their fellow employees and are susceptible to being demoted or fired by hostile managers. Quite often there will be disagreements about the propriety or the legality of the actions challenged by the whistleblower, and his or her views may prove to be incorrect.

There are also some countries (such as those in central and eastern Europe), where the memory of state-organized eavesdropping and the historical stigma attributed to whistleblowing still prevail. Notwithstanding all of these concerns, it is in the corporate interest to deal pro-actively with whistleblowers.

Establishing a whistleblowing culture

Responsible enterprises need to be made aware of actual or potential wrongdoing – such as bribery, fraud and accounting improprieties – by one or more of their employees or agents. It is other employees within the enterprise who are most likely[Page96:]to become suspicious or aware of any proposed or actual unlawful activity and who are therefore in the best position to bring it to the company’s attention. However, potential whistleblowers will not report internally if they fear reprisals from within the enterprise or suspect that management may condone or may even have participated in or approved the illegal activity. In that event, the company’s ability to take appropriate remedial measures will be severely impaired. If it is not perceived as “safe” to blow the whistle internally, a conscientious employee with concern for the public interest will report the wrongdoing to the authorities or the press. When unlawful activity has occurred, internal reporting enables the company to notify the authorities and to be perceived in a more favourable way in any investigation or prosecution that could ensue.

RELEVANT PROVISIONS OF THE ICC RULES AND THE OECD, UN AND OTHER CONVENTIONS

Article 7 of the 2005 ICC Rules of Conduct and Recommendations on Combating Extortion and Bribery provides that enterprises should implement comprehensive policies or codes which, (among other things), should “b) offer confidential channels to raise concerns, seek advice or report violations without having to fear retaliation”. ICC followed this up by developing guidelines on whistleblowing (see below).

The OECD Convention does not deal with whistleblowing, but the OECD Guidelines for Multinational Enterprises, adopted by the OECD in June 2002, explicitly caution companies not to punish those who report suspicious practices. The Guidelines set out what OECD governments have agreed constitute good corporate behaviour. Section II, entitled “General Policies”, provides that enterprises should “refrain from discriminatory or disciplinary action against employees who make bona fide reports to management or, as appropriate, to the competent public authorities, on practices that contravene the law, the Guidelines or the enterprise’s policies”.

The United Nations Convention against Corruption (UNCAC) of 9 December 2003 (Article 33) requires each state party to consider incorporating into its domestic legal system: “appropriate measures to provide protection against any unjustified treatment for any person who reports in good faith and on reasonable grounds to the competent authorities any facts concerning offences established in accordance with [the] … Convention”.

The Council of Europe Criminal Law Convention on Corruption of 27 January 1999 (Article 22) obliges member states to adopt: “such measures as may be necessary to provide effective and appropriate protection for those who report the criminal offences established in accordance with [the] Convention”.

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The Council of Europe Civil Law Convention of 4 November 1999 (Article 9) requires that each Party provide: “in its internal law for appropriate protection against any unjustified sanction for employees who have reasonable grounds to suspect corruption and who report in good faith their suspicion to responsible persons or authorities”.

The Inter-American Convention Against Corruption of 29 March 1996 (Article III, Section 8) requires signatories to consider creating, monitoring and strengthening “systems for protecting public servants and private citizens who, in good faith, report acts of corruption, including protection of their identities”.

The African Union on Preventing and Combating Corruption of 11 July 2003 (Article 5) requires State Parties to adopt: “measures that ensure citizens report instances of corruption without fear of consequent retaliation”.

The European Commission has not imposed any obligation on member states to enact whistleblower protection legislation. It has, however, taken steps to encourage internal whistleblowers among its own employees and, in April 2002, it adopted rules under which Commission employees have a duty to report concerns about serious wrong doing, and managers have a corresponding duty to follow up. Protection against retaliation is provided so long as the disclosure is made in good faith.

ICC Whistleblowing Guidelines

In 2008, ICC issued its “Guidelines on Whistleblowing”, the first world business organization of its kind to establish a global standard for facilitating the set up of these programmes. In publishing the guidelines, ICC noted that internal fraud reporting systems are not widespread throughout the world. An Ernst & Young survey of 13 European countries in 2007 showed that only 33 per cent of the company respondents said they had a hot line for employees to report incidents of possible fraud.

The ICC guidelines, aimed at helping companies establish and implement internal whistleblowing programs, recommended the following practical steps:

Enterprises should create a whistleblowing programme as part of internal integrity practices, which should:

  • Handle reports early on, in full confidentiality;
  • Appoint a high-level executive to manage the whistleblowing unit;
  • Communicate in as many languages as there are countries of operation;
  • Abide by external legal restrictions;
  • Determine whether reporting should be compulsory or voluntary and whether reporting can be on an anonymous basis;[Page98:]
  • Acknowledge, record and screen all reports; and
  • Enable employees to report incidents without fear of retaliation, discrimination or disciplinary action.

ICC Guidelines on Whistleblowing (excerpted)

  1. Enterprises are encouraged to establish, within their organization and as an integral part of their integrity programme, a whistleblowing system, commensurate with their size and resources.

Such whistleblowing system should aim to:

  1. Receive and entertain, in full confidentiality, all reasonable requests for advice and guidance on business conduct matters and ethical concerns raised by the employees of the enterprise and of its subsidiaries or affiliates (the group), but also, to any extent possible, by any of the group’s agents, suppliers and customers; and to;
  2. Receive and handle, at the earliest stage possible, by the same categories of persons, all reports made about any occurrence, whether established or soundly suspected, of a breach of applicable laws and regulations, the enterprise’s code of conduct or the ICC Combating Extortion and Bribery Rules of Conduct and Recommendations, which could seriously harm the enterprise or the group, if no remedial action is taken.

  1. Enterprises should appoint high-level personnel of undisputable repute and extensive work experience to be in charge of the management and administration of their whistleblowing units or ombudsservice. These personnel should be given a large autonomy within the enterprise and report to the highest echelon possible within the group. As part of these arrangements, an enterprise may designate a firm, external to the group, specialized in receiving and handling whistleblowing reports. Such firm should be independent, of undisputable repute and should offer appropriate guarantees of professionalism and secrecy.”

(For the full text of the Guidelines, go to www.iccwbo.org and click on“Anti-Corruption”.)

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Evolution of whistleblower protection legislation

Only in recent years has the potential value of employees’ raising concerns about wrongdoing in the workplace given rise to legislation designed to protect whistleblowers from reprisal. Initially, such legislation (for example, the US Whistleblower Protection Act of 1989) only applied to public sector employees, encouraging them to report wrongdoing and protecting them from retribution, irrespective of the disclosure route used.

Legislation in the United Kingdom (the Public Interest Disclosure Act of 1999 (PIDA) – responding in part to a variety of serious accidents (such as the Clapham and other train crashes in the UK that might have been prevented had employees come forward with their concerns regarding safety issues) – provides protection for both public and private sector employees with respect to disclosures made in good faith. Some of the recent legislation also recognizes the potential benefit to all concerned of internal versus external disclosure and creates incentives for employers to put into place internal reporting procedures. The UK statute, for example, protects whistleblowers when in good faith they raise concerns internally or to prescribed senior government officials. Wider disclosure (to the media, MPs or police, etc.) is protected if “reasonable” and where the matter:

  • Is exceptionally serious;
  • Is not raised internally or with a prescribed regulator because the worker fears that he/she would be victimized;
  • Is not raised internally because of reasonable belief that there would be a cover-up and there is no prescribed person; or
  • Was raised internally or with a prescribed person but was not dealt with properly.

Similar New Zealand legislation, enacted in 2001, conditions external disclosure on the perceived failure of internal disclosure mechanisms – i.e., where they do not exist or where the person to whom the employee must report is believed to be involved in the wrongdoing.

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The UK Public Interest Disclosure Act of 1999 (excerpts)

“Section 43(H)(1) A qualifying disclosure is made in accordance with this section if –

  1. The worker makes the disclosure in good faith,
  2. He reasonably believes that the information disclosed, and any allegation contained in it, are substantially true,
  3. He does not make the disclosure for purposes of personal gain,
  4. The relevant disclosure is of an exceptionally serious nature,
  5. In all the circumstances of the case, it is reasonable for him to make the disclosure”.

47B(1) A worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer on the ground that the worker has made a protected disclosure.”

Legislation in the United States – the Sarbanes-Oxley Act of 2002, Section 806 (see Chapter 6), enacted in the wake of the Enron and WorldCom scandals – calls for rules to be developed that will require attorneys to report violations “up the ladder” to the most senior levels of management and ultimately to the audit committee or the board if management fails to take appropriate remedial action. In the field of money laundering, recent legislation requires banks and lawyers to disclose suspicious transactions to the authorities. Sarbanes-Oxley has also stimulated an ongoing debate regarding possible limitations on the confidentiality provided by the traditional attorney-client privilege.

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Sarbanes-Oxley Act of 2002 (excerpts)

Sec. 1514A. Civil action to protect against retaliation in fraud cases

  1. WHISTLEBLOWER PROTECTION FOR EMPLOYEES OF PUBLICLY TRADED COMPANIES
    No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78 l), or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15U.S.C. 78 o) (d), or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee .

  1. To provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of section 1341, 1343, 1344, or 1348, any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders, when the information or assistance is provided to or the investigation is conducted by
  1. A Federal regulatory or law enforcement agency;
  2. Any Member of Congress or any committee of Congress; or
  3. A person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct);

(2) To file, cause to be filed, testify, participate in, or otherwise assist in a proceeding filed or about to be filed (with any knowledge of the employer) relating to an alleged violation of section 1341, 1343,1344, or 1348, any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders.”

The New York Stock Exchange Listing Manual (Section 303A.10) provides that listed companies must adopt a code of ethics for directors, officers and employees. The commentary stresses that each code of ethics must contain compliance standards and procedures that will facilitate the effective operation of the code and, inter alia, whistleblowing procedures and whistleblower protection.

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France Act nt. 2007 – 1598 of 13 November 2007 (Article 9) amends the Labour Code and prohibits any discrimination against a person who has reported or brought a witness report to an employer or to the authorities about corruption. Any discriminatory act is to be declared null and void.

Problems implementing an internal whistleblowing system

Experience with the development of internal whistleblowing systems has shown that concerns reported by employees pursuant to the system generally fall into one of four categories:

Real problems

First, there is the reporting by an employee of a concern that turns out to be a real problem, which the company is then able to deal with in a responsive and responsible manner. The reporting of genuine problems is likely to happen often enough to make the existence of an internal whistleblowing system worthwhile.

Perceived problems

Often an employee, on the basis of limited information, will in good faith report a concern which, upon further investigation by the company, turns out not to be a problem. In these circumstances, it is most important to communicate the conclusions back to the reporting employee in order to preserve the credibility of the programme and to ensure there is no perception of a cover-up by the company.

Employee grievances

Employees may try to utilize an internal whistleblowing system as a means of securing redress for personal employee grievances that have nothing to do with a breach of laws or the company’s code of conduct. These grievances may include issues relating to promotion or compensation or other job-related disputes with managers or fellow employees. These should be appropriately dealt with by some other process, usually within the Human Resources Department. Initially, a large number of calls may fall into this category, but the problem should decrease rapidly as employees come to understand the real purpose of the whistleblowing process.

Abuse of process

Finally, although this doesn’t happen very frequently, complaints are sometimes made under an internal whistleblowing system which constitute a clear abuse of the process. First, where the local legal system provides protection for whistleblowers, employees, for example, may invent or exaggerate to try and protect themselves from an anticipated lay-off or discharge. Due care needs to be taken to diligently investigate these complaints in order to identify their true purpose. Second, false or malicious reporting of a problem can be used by an unscrupulous employee who has a personal grudge against a manager or another employee or for other improper personal purposes. Appropriate disciplinary action needs to be taken against such an employee to effectively deter this type of abuse.

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For a whistleblowing system to work effectively, it is important that the ombudsperson and others responsible for administering the internal reporting system be of indisputable integrity and have the requisite knowledge, experience and training to be able to distinguish between these various categories of employee complaints and to deal with them appropriately. Selecting highly respected local employees to perform and explain the ombudsperson role contributes significantly to the success of the program, particularly in countries where there is a cultural sensitivity with regard to reporting concerns about fellow employees.

Concern that the system can be abused applies to external as well as to internal whistleblowing. In evaluating whistleblower complaints, government officials and the media should exercise care to determine whether the complainant may be misusing the process because of personal animosity or to serve political objectives.

Evaluating the bona fides of whistleblower charges is made more difficult when dealing with anonymous allegations. While anonymous complaints should not be rejected out of hand ? because whistleblowers may well have legitimate concerns about reprisals ? it is also true that the validity of allegations can be determined much more readily when the identity of the whistleblower is known.

In addition, company employees against whom allegations are made are also entitled to fair play. Their rights to defend themselves may be impaired when they have to respond to allegations by unidentified accusers. In medieval Venice, there was a long-standing controversy concerning the legitimacy of acting on anonymous accusations deposited into the mouth of the bronze lion on the steps of the Doges’ Palace. The Venetian authorities justified the process as one serving the public interest. Some historians, however, have regarded it as a dangerous abuse.

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Whistleblowing: two company codes

3D Systems

“We believe that communication and ‘whistleblowing’ perform a valuable function in maintaining high ethical standards of conduct and reducing the risks to the Company, its employees and stockholders from conduct that does not meet our high standards. Accordingly, in the unlikely event that you become aware of circumstances that appear inconsistent with our Code of Conduct or if you are instructed by a supervisor or manager to act in a manner inconsistent with our Code of Conduct, you are expected to inquire into the matter to assist the Company in avoiding violations of the Code of Conduct. Initially, we encourage you to review the matter with your supervisor, but if the matter is not resolved as a result of those discussions or you are uncomfortable in discussing the matter with your supervisor, you should contact the Chief Executive Officer or the General Counsel of the Company to explain the facts. If the facts reveal that such a violation may have occurred, the Company will investigate the situation and take appropriate action.”

Honeywell International

“ … all employees shall have access to one or more telephone help-lines, which will be monitored on a 24-hour basis by a professional, independent contractor, through which suspected violations of laws, regulations, Company policies, or the Code of Business Conduct may be reported. This help-line is not intended to replace normal supervisory channels for reporting questionable conduct or seeking advice about appropriate ethical behavior.

Any employee who in good faith raises an issue regarding a possible violation of law or Company policy will not be subject to retaliation and their confidentiality will be protected to the extent possible, consistent with law and corporate policy and the requirements necessary to conduct an effective investigation. Any supervisory personnel who retaliates against an employee as a result of such employee’s report of an alleged violation of law or Company policy shall be subject to disciplinary action, including termination, and may risk criminal sanctions as a result of such actions.”

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Essential ingredients of an effective internal reporting system

Having clearly established a policy providing for employees to report concerns about potential violations of company policy, including the enterprise’s anti- corruption policy, an enterprise needs to establish a clear road map indicating what employees should do when they have a concern. This will encourage employees to report promptly and in a way with which they feel comfortable. The road map should contain the following provisions:

  1. Employees need a number of available reporting channels within the business unit where they can take a concern (for example, to a supervisor, company legal counsel or to the next higher level of management). This is important because the concern may involve a fellow worker within the same business component or possibly the employee’s own manager. In this regard, an enterprise, in addition to establishing a help-line, would be well advised to appoint at least one company ombudsperson, outside and possibly also within each major business unit, who is committed to dealing fairly and objectively with all concerns reported to them.

  1. Employees should be encouraged to use the reporting procedure with which they are most comfortable. Often reporting to someone within their own business unit can be most effective in arriving at the prompt resolution of an issue. Also, reporting channels should reflect the languages spoken in the different countries of operation.

  1. Prompt reporting of a concern about a possible violation of the company’s “no- bribery policy” and other anti-corruption policies is crucial. Delays are likely to allow a problem to grow. Often the potential problem can be averted or the damage minimized if the issue is raised early. Companies are therefore increasingly adopting an affirmative duty to report.

  1. An employee should be encouraged to report openly but should be able to report anonymously. However, there are circumstances in which the company must disclose the concern and the findings of its subsequent investigation to appropriate management personnel or government authorities. It is not possible, therefore, for an enterprise to guarantee confidentiality in all circumstances.

  1. As emphasized earlier, company policy must clearly prohibit any form of retribution or retaliation against an employee who reports information about a policy concern in good faith. This is a critical element of a successful whistleblower policy, as employees will not report concerns (particularly those relating to those in more senior positions) when they fear their position in the company will be compromised. This does not, however, exclude a company from taking appropriate disciplinary action if an employee abuses the policy by making false accusations against another employee. In most companies, whistleblowing policies will not be limited to bribery and will extend to other policy areas, such as anti-trust, environmental compliance and improper accounting practices.[Page106:]
  2. If the problem reported on recurs or if the employee feels that corrective action has not been taken within a reasonable time, he or she should be encouraged to raise the matter with one of the other contacts listed in the company guidelines. Clearly, if the situation seems to be recurring or has not been resolved, the employee should raise it again.

  1. A company needs to differentiate between various problems raised by whistleblowers and establish a process for each. This involves classifying the concern to determine what needs to be done next, assigning appropriate personnel to investigate, determining appropriate corrective actions (clarifying the issues, providing education/training or improving procedures, etc.) and, where warranted, taking disciplinary action appropriate to the breach. The latter may range from a warning to suspension or outright dismissal.

  1. In order for the process to be fair and objective, all whistleblower reports should be diligently acknowledged, recorded and screened, and the enterprise should also provide feedback about the outcome of the investigation to the employee who originally reported the concern as well as to the person whose behaviour was reported.

Finally, the enterprise should at all times comply with all legal requirements relating to the establishment of whistleblowing procedures, as well as those related to providing notice to relevant governmental authorities.

In short, early reporting, identification and resolution of potential issues are critical to the success of the process.

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The Ombudsperson system

In his recent book, Ben Heineman Jr, General Electric’s Chief Legal Officer for nearly 20 years, currently a Senior Fellow at Harvard University, commented on the ombudsperson system as follows:

“Virtually every oral and written integrity communication to employees, starting with the fundamental integrity guide, should stress the importance of reporting concerns and spotlight the ombuds system. The ombudsperson:

  • Refers matters raising integrity concerns to financial, legal and HR staffs for investigation
  • Tracks all such matters to ensure prompt close-out
  • keeps employees up-to-date on the status of the concern

The word concern is more appropriate than possible violation or charge because it encourages people to report broadly on ethical and reputational questions as well as formal policy issues – and it is better to have more, rather than fewer, reports.

An effective [Ombuds] system has these elements:

  • Employees should be strongly encouraged to report concerns immediately, through corporate or business ombudspersons or functional staff, using integrity help lines, letters, phone or e-mail.
  • Employees have a duty to report concerns and not to retaliate. The ombuds system only works if (1) employees have an obligation to report concerns, and (2) failure to do so leads to discipline, including termination in cases where very serious matters (e.g., improper payments, accounting fraud) are left unreported. The corollary is that retaliation is an equally serious offense, with termination as the likely result.
  • Finance and legal staffs must fully, fairly and promptly investigate all concerns, without fear or favor. If allegations relate to people at the top of the company, the CFO or the GC may recommend that outside investigators be retained.
  • The ombuds system’s important cases and statistical summaries should be regularly reported to the CEO and the board.” Employees can report anonymously if they so choose.
  • Employees have a duty to report concerns and not to retaliate. The ombuds system only works if (1) employees have an obligation to report concerns, and (2) failure to do so leads to discipline, including termination in cases where very serious matters (e.g., improper payments, accounting fraud) are left unreported. The corollary is that retaliation is an equally serious offense, with termination as the likely result.[Page108:]
  • Finance and legal staffs must fully, fairly and promptly investigate all concerns, without fear or favor. If allegations relate to people at the top of the company, the CFO or the GC may recommend that outside investigators be retained.
  • The ombuds system’s important cases and statistical summaries should be regularly reported to the CEO and the board.”

From High Performance with High Integrity, reprinted with the permission of Harvard Business Press (2008).

Summary of the ICC Recommendations on whistleblowing

It is very much in the interest of an enterprise that wishes to prevent bribery and other forms of corruption to establish, as an integral part of its integrity programme, a whistleblowing system, commensurate with their size and resources, under which employees (and, to the extent possible, any of the enterprise’s agents, suppliers and customers) will feel comfortable reporting concerns without fear of retribution. Such an approach will enhance the company’s chances to become aware of, and to appropriately deal with, a concern before an illegal act has been committed rather than after the fact, when the damage has already been done. If reporting is delayed, the company’s reputation can be seriously harmed and the company can face a serious risk of prosecution. Having an effective internal whistleblower process is highly preferable to facing external whistleblowing, which can be more detrimental to the company and its employees.

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Therefore companies should:

  • Establish an internal disclosure programme (“whistleblowing”)which encourages or requires employees to identify concerns within the company about what is or could be a possible violation of the company’s anti-corruption policy;
  • Not limit the reporting obligation to information relating to actual breaches of the policy, but extend the obligation to concerns or suspicions relating to actions which might lead to illegal acts in order that they can be prevented;
  • Encourage employees to report concerns promptly, again so that the company can stop the illegal activity before it occurs;
  • Establish effective mechanisms, such as hot-lines and ombudspersons, that can deal confidentially with employee reports and with which an employee will feel comfortable;
  • Guarantee that there will be no retaliation or repercussions regarding issues raised or information provided in good faith;
  • Encourage reports to be made openly but allow them to be made anonymously (since a company would be foolish not to pay attention to anonymous reports) and make best efforts to honour an employee’s desire for confidentiality;
  • Establish a process within the enterprise for effectively dealing with concerns that are raised;
  • Take appropriate steps to respond to problems that are identified - including education, modifying processes and disciplinary action when required - and maintain statistical records that identify trouble spots;
  • Provide periodic reports and summaries to the board and comply with laws relating to external reporting to relevant authorities;
  • Ensure that, whenever possible, the reporting employee receives appropriate feedback.

Michael Davies is a member of the ICC Commission on Anti-Corruption. He is also the author of Chapter 4 in this handbook.

Acknowledgements to Unicorn and TUAC for making available their Initial and Comparative Review on Whistleblowing and Corruption, August 2001, and to Ben W. Heineman Jr. for allowing us to include excerpts from his book High Performance with High Integrity published by Harvard Business Press (2008).