June 10, 2013

Corporate Compliance Insights: "The Whistleblower Paradigm: How Companies Can Get in Front of a Crisis"

An article in the latest issue of the online magazine for compliance and ethics professionals recommends Ombuds as a resource for responding to and mitigating whistleblowing. David Martin, a Principal with Berkeley Research Group, cites IOA research to explain why “employees would rather report directly to somebody they know than to a hotline.”

There are many methods and strategies that management can implement to ensure that their employees can trust the process and encourage them to report concerns internally before seeking outside assistance.  The use of an independent, neutral outside professional such as an ombudsman, who holds the reputational gravitas, can be extremely effective.  For management, the implementation of an individual as an ombudsman or designation of an ombudsman office can have the positive benefits of communicating to employees that management takes their concerns seriously, respects their views and wants to provide for an internal channel for them to be heard.
The implementation of an ombudsman also has the potential to offer management a number of other significant advantages in their quest to try to quell outside whistleblowing and foster internal reporting and action.  The placement of an ombudsman can help demonstrate that there is a responsive and astute individual who will insure that the process is fair, smart, efficient and effective.  If implemented correctly, an ombudsman’s office can be cost effective, reduce reputational risk and demonstrate to stakeholders, employees and regulators management’s commitment to governance and compliance. 
(Corporate Compliance Magazine.)

Related posts: National Association of Corporate Directors Newsletter Touts Ombuds as Essential for Effective Board Governance; Corporate Secretary Magazine: The Role of an Ombudsman in Supporting a Company's Compliance Efforts; District of Columbia Bar Sponsors Program on Corporate Ombuds.

1 comment:

  1. This is such a critical aspect of compliance yet most companies do not seem to find the gold nugget that is hidden in this situation: before any employee becomes a whistleblower first s/he tends to tell others internally about his/her concerns. Sometimes they tell their boss. To find a “label”, this makes this employee a “dissenter”. Companies, get this right: dissenters are good for business. Why? They let you know what is wrong before they get frustrated and go out of the company (whether the media, outside agency, etc.) with a disclosure. Companies need to take these employees seriously and investigate their concerns, complaints, hunches rather than brushing them off and labeling the employee a troublemaker, an ingrate or otherwise. Minimizing internal reports cause employees with a conscience to move their concerns further. So long as they are internally conveyed, the company is in good shape. I tell my clients to “Love Dissenters” because they can save the company money, embarrassment and more if they are not taken seriously. They act as a fire detector, they warn you ahead of time so you can react and fix any potential problems. Companies should include in their policies processes that allow for dissenting employees to feel they are being taken seriously. Yes, hotlines are great but a formal process to handle “dissenting opinions” is critical. The last thing your company needs is a whistleblower. By becoming aware that there is a preceding stage to being a whistleblower and recognizing the difference can go a long way in avoiding whistleblower claims. Ombuds can assist dissenters in exploring their options about expressing their concerns to management.