Whistle-blowing is the disclosure by a person, usually an employee in a government agency or private enterprise, to the public or to those in authority, of mismanagement, corruption, illegality, or some other wrongdoing.
The Public Interest Disclosure Act 1998 protects any person who makes disclosures of information in the public interest, allowing them to bring action for circumstances in which they are victimised for doing so. The Act aims to encourage openness in the workplace and create a positive environment in which employees can raise concerns without fear of reprisal.
Under the Public Interest Disclosure Act 1998, disclosure is concerned with information about criminal activity, miscarriage of justice, or breach of health and safety (‘protected disclosures’). The Act also covers workers, contractors, trainees, agency staff, home workers, police officers and every professional in the National Health Service (NHS). It does not cover the self-employed (other than NHS), volunteers, the intelligence services and the armed forces.
Workers making protected disclosures are protected from victimisation, given rights if dismissed, and remedies including compensation.
Why are whistle-blowing procedures important?
- Whistleblowing informs those who need to know about dangerous or illegal activities that affects others and gives them an opportunity to address the issue. Therefore, whistleblowing protects individuals and sometimes saves lives.
- Setting up formal whistleblowing procedures within an organisation strengthens corporate governance and ethics in the organisation as well as being a useful risk management tool.
- Whistleblowing procedures in an organisation encourages individuals to disclose concerns using appropriate channels before these concerns become a serious problem, damaging an organisation's reputation through negative publicity, regulatory investigation, fines and/or compensation.
Audit committees and whistle-blowing policy
The UK Financial Reporting Council (FRC) publishes the Combined Code on Corporate Governance, for listed companies. The 2008 edition of the Code includes a provision on whistleblowing.
Provision C 3.4 of the revised Code states:
"The audit committee should review arrangements by which staff of the company may, in confidence, raise concerns about possible improprieties in matters of financial reporting or other matters. The audit committee's objective should be to ensure that arrangements are in place for the proportionate and independent investigation of such matters and for appropriate follow-up action."
Organisations should introduce a whistle blowing policy and procedures to meet legal requirements, and include the following points:
- The organisation takes malpractice seriously, giving examples of the type of concerns to be raised, so distinguishing a whistle blowing concern from a grievance
- Staff has the option to raise concerns outside of line of management
- Staff are enabled to access confidential advice from an independent body
- The organisation will, when requested, respect the confidentiality of a member of staff raising a concern
- When and how concerns may be properly raised outside the organisation (e.g. via a regulator)
- It is a disciplinary matter both to victimise a bona fide whistle-blower and for someone to make a false allegation maliciously.
Should I blow the whistle?
An individual in an organisation who is thinking about "blowing the whistle" will need to consider, amongst other things, how best to raise the concern in the public interest so that it will be properly addressed, while at the same time minimising any potential risk to himself.
In general, an individual in an organisation should discuss the matter internally first, using all appropriate channels, and then resort to going outside the organisation.
If you are concerned about possible misconduct, you might find the following considerations helpful in deciding how to proceed:
- Is it a genuine concern or might there be an innocent explanation?
- Who is affected and how?
- What are the risks attached to the misconduct?
- How serious or imminent are those risks?
- Does the organisation have a whistleblowing policy?
- What guidance and advice does the Institute provide? What is the risk of professional disciplinary action?
- What are the options for raising the concern internally or externally?
- Has the concern been raised and if so, how and who with? What was the response?
- Are there any other options?
- Is there legal protection for whistleblowing?
- Financial Reporting Council October 2008 Guidance on Audit Committees