Never before were there so many laws to protect individuals that stand up and speak out about unethical behaviour in their company or organisation. Despite the improvement in the legal frameworks and continued efforts it is still risky to do so, but here are 5 important steps whistlerblowers need to follow to make sure they can limit the risk and avoid dangerous mistakes.
Antoine Deltour, now in his early 30s, used to be an employee of the Big Four auditor PwC. When he was in his mid-twenties, he started what came to be known as LuxLeaks, the scandal about the Luxembourg’s tax rulings set up by PricewaterhouseCoopers to make sure their corporate clients could develop strategies to avoid taxes. More than 300 multinational companies based in Luxembourg benefited from the PwC praxis the disclosures attracted international attention and comment about tax avoidance schemes in Luxembourg and other corporate tax havens. It also led to the conviction of Deltour and other whistle-blowers and is an example about the lack of protection that these informers are awarded.
LuxLeaks, Dieselgate, the Panama Papers, the list of corporate scandals seems endless and demonstrates the important role of informant on the inside in uncovering unlawful activities that damage the public interest. Why is it so hard than to protect these people?
A complicated situation
To understand this complicated situation, it is important to understand the concept of whistleblowing and the resulting conflicts of interests and rights of involved parties. If an employee discloses information that “he or she reasonably believes is evidence of illegality, gross waste or fraud, mismanagement, abuse of power, general wrongdoing, or a substantial and specific danger to public health and safety”, it most certainly violates the rights of the organization they work for.
Knowing the importance of this inside information though, lawmakers around the world continue to try to improve the rights of whistle-blowers. For instance, in the U.S., laws that protect informers from retaliation vary between industries and between private and public sector. International organisations have adopted internal policies, which do not have the force of law, but establish a framework that is enforced by internal functions.
In the EU, the Commission proposed in April new EU-wide standards that will guarantee a high level of protection for whistleblowers who report breaches of EU law by establishing safe channels for reporting both within an organisation and to public authorities, protecting whistleblowers against dismissal, demotion and other forms of retaliation, and requiring national authorities to inform citizens and provide training for public authorities on how to deal with whistleblowers.
Despite these efforts young professionals are especially vulnerable when firms behave unethically as they have less working experience and find themselves often in an economic situation that prevents them from speaking out because of the perceived risk of loosing a job.
5 important steps
It is therefore all the more important that potential whistleblowers are prepared and the following 5 steps should help them:
- The process actually starts way earlier than most people believe, i.e. as early in the application process and we don’t mean by that that a candidate should get ready to blow the whistle before joining an organisation. No, it’s more along the line of getting information on the culture of a firm to make an educated decision about whether you wanted to join such an organisation. After all, you know about the mob’s reputation and most people don’t want to join them for these reasons.
- Most whistleblowers turn out to be lone rangers, but to avoid the fallout from such an incident it is important to have a strong network of the right people within a firm. Employees should always try to build relationships with control functions such as legal, compliance and audit and try to understand what they do. Just in the same way you might want to build a relationship with HR or Tax to get the most out of other aspects of your job. If things turn sour, these people are the ones you can go to if there is a problem.
- If an employee has concerns about a particular activity in their firm, it is imperative to build a paper trail. If your boss asks you to get something done that doesn’t quite sound right and demands at the same time not to be included on emails or other documents, you know you better start covering your back. For example, try and keep any document that highlights these requests or formulate them in an email to someone else. In any case, it is important to be a thorough as possible when creating a paper trail about what happened, whether and when you raised complaints and issues, plus whether you faced any retaliation.
- Make sure you keep all relevant information in a safe place. Storing those print-outs in your drawer might not be such a good idea, especially if things blow up and you’re not even allowed back into the building some day and that takes us to the final and maybe most important step…
- Talk to a lawyer. Seriously, don’t be afraid to talk to a lawyer who is specialised in helping whistleblowers. First of all, it helps to speak to a someone outside to get another view on the situation as you might have got it all wrong. Even if that is not the case, an experienced lawyer will be able to guide you through the process and help you avoid mistakes. And don’t underestimate that lawyers can conduct their own investigations by taking the information given to them and speak to the control functions in a firm without revealing your identity. If for instance management is reminded by an individual outside of the organisation, they might be inclined to act on their fiduciary responsibility and personal liability for ignoring wrongdoing whilst they might have chosen to ignore your warnings.