The view from across the pondProfessor David Lewis recently asserted that he would “welcome criminal charges against companies that victimised whistleblowers” and voiced his support for rewarding whistleblowers for exposing wrongdoing, stating that this could help dissipate the feelings of isolation and trepidation felt by those contemplating blowing the whistle. This would put the UK whistleblowing policy further in line with that of the US. The Dodd–Frank Wall Street Reform and Consumer Protection Act was passed into US law in 2010 and features an incentivised whistleblowing procedure. Following its inception, several high profile cases such as Sherry Hunt of Citibank caused a rush of blood to the head and scramble of keys to the vault for businesses keen to protect profits and reputation and a raft of critics too to the internet, and to congress. Whistleblowing in the US is increasingly viewed as an extension of the ambulance-chasing culture that had further tarnished the insurance industry and become part of a litigation-happy culture across the pond. Critics also fear that the SEC’s whistleblowing site that was launched in 2011 and provides a convenient mechanism with handy navigation for “submitting a tip” and “claiming an award”, further diminishes the altruistic possibilities of reporting genuine misconduct for the protection of others. Concerned parties worry the advent of such mechanisms will encourage whistleblowers to bypass internal reporting processes, as outlined in IMA Statement of Ethical Professional Practice. The SEC has, of course, conceded such a possibility and asserts that they will consider accepting a claim that has already been reported internally if the report is submitted within 120 days.
These observations are not meant to trivialise the process that such whistleblowers go through, and even a cursory glance into Ms. Hunt’s case shows that there were significant grounds for investigation, incrimination and compensation. In many cases whistleblowing requires a high degree of tenacity and stamina in what can be an enduring and challenging process. Under Dodd Frank the amount paid to the whistleblower is in direct correlation with the sanctions ultimately imposed by the Commissions (SEC and Commodities Futures Trading Commission), providing they exceed $1,000,000 (between 10 and 30%). Clearly this is not a route that any chancer with a petty grievance would go down for an extra buck. In addition, it should be noted that Dodd Frank affords the whistleblower considerably more protection than the SEC. They are protected from employer counteraction and are able to bypass the traditional administrative process with the Department of Labour and bring action directly with the Federal District Court.
The Serious Fraud Office (SFO) does not offer financial rewards to whistleblowers, although this is not to say the UK is fundamentally against incentivising reporting of wrongdoing; the Office of Fair Trading offers rewards of up to £100,000 for companies or individuals who report illegal activity that leads to prosecution or fines. An added bonus is the possibility of immunity from prosecution; something not offered by the SFO’s own whistleblowing procedure. The Ministry of Justice is in the process of developing deferred prosecution agreements which some commentators feel could see a rise in companies self-reporting to negotiate a more favourable settlement, and therefore an opportune time to review incentivised reporting. Aside from corporate misdemeanours there are a number of other situations where a more open, accepted and incentivised culture of whistleblowing would be helpful; consider issues of national security, benefit fraud (if memory serves there used to be a £50 prize for ‘beating a cheat’ back in the 90s…) and considering the recent healthcare scandals a reward process could certainly find a useful home at the NHS.
In a utopic ideal we would not only have a world devoid of incentivised whistleblowing but we would not have the crime that warrants hotlines in the first place. One of the most clear-cut ways of letting someone know that they are being rewarded, or have done the right thing, is to give them money. Assuming that a financial reward will colour the motivations of whistleblowers overseas, or perhaps in the future, on these shores, shows little understanding of the tribulations surrounding the process. The benefits from encouraging personal ethics in the workplace or society and considering rewarding those for taking a stand should be up for discussion. Consider the possible ramifications a whistleblower might be subjected to; loss of earnings, promotion delay, sanctions, harassment and other moral and material damage. Organisations that foster whistleblowing as an integral part of their corporate governance strategy help protect themselves against fraud, bribery, corruption, malpractice and much more. Not to mention the highly embarrassing and costly media and public exposure such disclosures can result in. And let’s not forget protecting those who have blown the whistle and put others security and wellbeing above their own; who have risked career, associations and safety.
Supposed financial motivations aside, what does motivate people to blow the whistle? Wanting to do the right thing, a desire to see accountability and justice, a sense of responsibility, protecting colleagues, protecting revenue of employer (and therefore one’s own job) are all valid, prevalent and positive reasons for whistleblowing. Some individuals may balk at disclosing wrongdoing in larger organisations as they perceive their ability to influence change as limited at best. But history has shown on plentiful occasions that these heroic people can become a David that beats Goliath, whilst the latter was too busy polishing his armour. Clearly bad pennies do turn up; those who are blinded by the possibilities of media attention or focussed solely on retaliation for, perhaps, dismissal or the perception of unfair treatment. But submitting to such scepticism is reductive and unhelpful to whistleblowing as a process and area of study.
The vast majority of us hope to live in a society of fairness and accountability, and ultimately perceive ourselves as moral agents promoting these values. This idea of the individual as the driving ethical force is referred to as ‘virtue ethics’. Academics such as Thomas Alured Faunce see virtue ethics as a more appropriate and progressive framework for whistleblowing; that disclosure is more a reflection of one’s own moral character and actions, rather than those of society at large or that we are just passive beings, blindly adhering to prescriptive rules. When it comes to negotiating ethical quandaries, looking to ourselves to honestly gauge how we would handle situations affords a more productive perspective than judging others on our assumptions of their motivations.
In 2010 The National Whistleblowers Centre (NWC) submitted a report to the SEC entitled “Impact of Qui Tam Laws on Internal Compliance.” The report was in response to concerns voiced by SEC commissioners and corporations regarding Dodd Frank’s potential impact on existing corporate compliance programs. The study analysed cases filed under the False Claims Act from January 1, 2007 to present and found that whistleblower rewards have “no impact whatsoever on the viability of internal corporate compliance programs or the willingness of employees to report suspected violations to their employers.” 87% of these filed cases initially reported their concerns internally, either to supervisors or compliance departments. Just 0.9% of employees who would eventually file a qui tam case worked in compliance and did not initially contact their supervision prior to contacting the government.
David Harris has been the Head of Business Conduct at BAE systems since 2009 and is a Chartered Member of the CIPD. Prior to BAE he worked at Lockheed Martin for 12 years in a variety of roles including, most recently, Director of Corporate Responsibility & Ethics, Ethics Officer and HR Operations Manager. David’s specialities include business ethics, ethics and business conduct, HR management, people management, coaching and mentoring and programme management.
How has the culture of ethical business changed in the last 25 years?
I’m not sure it’s been a culture change per say, more a need to clean up some ways of “accepted” business and make them “acceptable”. Stakeholder expectations have increased dramatically. The speed and detail that business-related information is now available would have been unthinkable a lot less than even 25 years ago. This increased information and knowledge has enabled us to challenge the way that people act and business is done. It’s no longer about what we do; it’s how we do it. Another change has been the clear demonstration of how irresponsible business can so negatively affect the lives of individuals, with no direct connection between the two.
What are the greatest challenges ethical businesses face?
For me it’s creating and sustaining the right culture and knowing that you have it. For all the effort and creativity we put into codes of conduct, policies, compliance training et al, everything hinges on our employees acting as we want and expect them to act, including how they deal with dilemmas. Another challenge is satisfying the need for and variance of relevant and engaging information that stakeholder groups seek. Providing the right types of evidence to support your statements and for that evidence to enable others to trust the same statements is wholly necessary, if a bit tricky!
If you could set one piece of global legislation to make businesses work more ethically what would it be?
I’m not sure that more legislation is what we need because we are talking about behaviours of people and organisations (collections of people). Legislation, like policies and processes, has its place, but what determines how a business works and how its people respond to situations is culture – ethical culture built in an ethical environment on ethical values and principles. Rather than more legislation, how about effective enforcement of that which we already have? Perhaps then we would see any gaps.
In terms of ethics, what are your greatest fears for the UK business community?
I’m not sure I have too many fears other than perhaps a creeping complacency from watching the financial and media sectors taking a beating. Complacency based on a [mistaken] belief that it “could never happen” to them. I think the UK Bribery Act forced the debate around, and understanding of business ethics and how it differs to compliance. In recent years I have seen a dramatic increase in the breadth of industry sectors and businesses I come into contact with at conferences and network-events, and the discussions are very different now. The openness amongst those working in this area is both refreshing and encouraging; it’s almost camaraderie and one I rarely felt outside of my own organisation when in HR or engineering. What also allays my fears is that, across the UK business community, this area of work is attracting very talented individuals with broad expertise, skills and knowledge, me not included of course! People who have the courage and conviction to drive the changes where they are needed in their organisations.
Geographically, what are the most predominant areas for risk at present? And what is the nature of those risks?
I don’t feel too qualified to comment in detail or to single out any region or country. But what I do think is that it doesn’t really matter where you are or intend going – robust and effective risk management through your planning as well as execution phases is critical. Having a long-range risk radar that prevents you making assumptions against limited pieces of information or intelligence is a great help. Being able to collate often disparate pieces of data to build a picture that then informs and promotes the discussions amongst and challenges from senior leaders. If you can do this then it doesn’t matter if it’s a new joint venture in the EU or a new plant in Asia, the risks will be identified, qualified, quantified and managed.
The response to the Bribery Act from the business world has been well documented; but from your own point of view, what have been the most significant contentions and concerns with adhering to the legislation?
We welcomed the Act all along because we saw the need for something that helped create a level playing field for certain business activities and transactions around the world. I think what gave most people concern was the idea of needing “adequate procedures” without being told what they should look like. For us we continue to devise better ways of measuring and monitoring various processes and procedures to increase our confidence of “adequacy”. I’m not a lawyer, but personally I get a sense that the idea of self-disclosure is something that many are at best unsure of, at worst completely distrusting.
What are the aspects you most enjoy/like about working in business ethics?
I absolutely love the fact that everything we do has to be the result of data and information gathering; some process of analysis and synthesis to understand what is actually going on; the design, development and deployment of improvement interventions and then monitoring those to see if they had the impact you set out for. Through networking and benchmarking I see lots of companies and talented individuals doing great things and many new ideas emerging all of the time. But no-one can tell us what we need to do for BAE Systems, or how to do it – though some do try! It’s for us to decide and explain and although we find ways to test things out there is little if any room for failure.
And least enjoy?
Ironic – but not having a book that now again I could turn to that says “here’s the solution to your problem”! Not that I would want this often, but I do get a bit put off by the amount of academic research, opinion and direction out there that is almost impossible to translate into the workplace.
What has been the toughest challenge of your career? Moving from a career in engineering into HR management was a massive eye-opener for me. Until then I thought I knew people as well as a bit about the business. I wasn’t even close! So much change for me personally, at a time that the company I worked for was changing significantly too, meant that the first year remains the most sustained period of intense pressure I have faced. Having said that it is probably the most enjoyable because I learnt so much about myself, and it wasn’t all good either!
What do you consider to be your greatest achievement?
I don’t do questions like this very well as there is very little I have achieved without the help and support of others. From the workplace the thing I am most proud of is helping some of those I have been lucky to manage realise their own potential. To see people grow in capability and confidence to move on to and be successful in roles way beyond their early ambition gives me real satisfaction. Maybe one or two of my early managers feel that about me? Or maybe not!
As Europe and the world becomes more integrated, working practices change fast and often affect more than one country at a time how to you keep abreast of what affects you and your company?
Sometimes the amount of information and the volume of opinion can be overwhelming to the point where it would be easy to switch it all off. But it is essential to keep abreast and so I rely on one or two good sources of “summarised” reporting (I can go to the detail if I wish) and networking. I find that regular contact with well-chosen groups and trusted, like-minded individuals help in sharing ideas and practice and keeping me sane (being in an ethics role can become lonely!). We may be dealing with things differently, but most of us are struggling with exactly the same source-problems and I find that sense check really valuable. One of the things I would recommend anyone does is develop some effective filters for things you pick up. If it sounds like waffle or narrow opinion, drop it and leave it dropped. If it sounds like a real nugget you may want to refer back to, put it somewhere you will easily find it. But don’t become a squirrel, like cupboards even IT systems have their capacity limits!
How do you encourage best ethical business practice internationally?
The “must do” and “must not do” items of policy are simple, but they cover just a small percentage of what our employees are likely to face. One of my favourite quotes is “If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck”. Almost everyone has intuition for when something isn’t right – that is the time to seek advice. If it does not fit with our values and expectations then it isn’t right, for us at least. And of course, having access to a confidential helpline that they can trust will encourage them to seek advice in difficult circumstances.
See David’s LinkedIn profile.
View BAE’s Corporate Social Responsibility Pages.
Read our interview with Philippa Foster Back Back, Director of the Institute of Business Ethics.
In the 18th Century, Lord Chancellor, Edward, First Baron of Thurlow, expressed his frustration at pinning wrongdoing on slippery businesses; “Did you ever expect a corporation to have a conscience when it has no soul to be damned and no body to be kicked?” As a supposedly enlightened and media-literate people (or a bunch of folks hell-bent on putting business leaders in metaphorical stocks), we enjoy a culture of corporate governance that is shaped by ethics and systemic controls; where the corporation has a public face. The Baron’s aforementioned entity in its contemporary guise may not necessarily lose sleep about its status at St Peter’s Pearly Gates; but it will invariably try to avoid a good kicking.
The Corporate Manslaughter and Corporate Homicide Act 2007 came into effect in April 2008, ‘though companies have been open to manslaughter proceedings since 1965. The first conviction (link to http://www.expolink.co.uk/2011/03/corporate-manslaughter-act-first-conviction-arises/) in February 2011 of Cotswold Geotechnical Holdings Ltd resulted in a fine of £385,000, £115,000 under the minimum fine suggested in the 2010 guidelines, due to its precarious financial position. Cotswold Geotechnical Holdings is a relatively small company, the litmus test of the reach of the law would be when a substantial organisation with an elaborate management structure is prosecuted. For a successful conviction the following needs to be proven; that the defendant is an organisation that causes the person’s death, that the duty of care owed by the organisation was breached due to mismanagement of activities on a senior level and that the defendant must not fall within one of the exemptions to the Act (military operations, policing, emergency response, child protection work and probation to name a few).
Given that the first conviction resulted in nothing more than a fine, it would seem that holding iniquitous companies to account would be as easy as juggling salt. If a company has diffuse layers of management, assigning accountability takes you right back to grappling with the salt seller. What corporate liability benchmark should be imposed when deciding if it is the company or the individual at fault? Fundamentally, the Act needs to show that its purpose, to streamline the accountability process for corporate manslaughter cases, is workable both with cases of clear liability and for those where multiple parties or contexts are involved.
The public, while sceptical of the fluidity of legal proceedings in the UK, is generally in support of the onus of responsibility being held by business owners, and suspicious of junior employees being scapegoated to avoid penalty; of situations where corporations wriggle free after neglecting their health and safety obligations. Media proliferation and public demand for accountability in the face of disasters such as the Potters Bar train crash and the Costa Concordia have added to the carrion call for change.
In December 2005, Olivia Bazlinton and Charlotte Thompson, aged 14 and 13 respectively, were killed instantly after being hit by a train at a level crossing at Elsenham station. Network Rail pleaded guilty to two charges under The Management of Health and Safety at Work Regulations and to one charge under the Health and Safety at Work Act. A risk assessment conducted in May 2001 noted the wicket-gate pedestrian crossing was “undesirably risky”, and a report three years prior to the incident had recommended automatic locking gates at the crossing, but this had never been actioned. Despite the judge damning Network Rail with allegations of “corporate blindness” and acknowledging that the company “failed to ensure that the risks were properly assessed, controlled or managed”, no charges were made under the Corporate Manslaughter Act and the company was fined £1m within the aforementioned statutes. So, to surmise, a public crossing with considerable footfall was allowed to remain for a number of years with inadequate safety measures in place, resulting in tragedy, the company admitted fault and still charges of corporate manslaughter were deemed inappropriate! Motivation indeed for large organisations to commit to governing their health and safety with an iron fist…
In July 2008 three year old Meg Burgess was killed when a wall designed by George Collier and constructed by his company, Parcol Developments, collapsed on to a footpath in Prestatyn, north Wales. Rosemary Ainslie, lawyer for the Crown Prosecution Service (CPS), deemed that as Mr Collier represented ‘only’ half the company directors it was not in the public interest to extend the charge to Corporate Manslaughter. This strikes me as a problematic and unproductive decision, not to mention one with suspiciously avaricious undertones. The law, supposedly aimed at protecting and compensating citizens like Meg’s family, was swayed in this instance not to prosecute Parcol, who as an organisation with depleted coffers had little to offer the CPS.
David Cameron’s recent plans to privatise roads could result in increased litigation for private companies if accidents arise from poor maintenance. At present this is under the remit of the Highways Agency, Transport for London (TfL) and similar public bodies. Following the death of cyclist Deep Lee at a notoriously dangerous stretch of road in the capital, Detective Chief Inspector John Oldham, head of Scotland Yard’s Road Death Investigation Unit, said that although corporate manslaughter was one of a raft of offences that could be applied to the incident, the Act was “badly drafted” and had “loopholes everywhere.” Transport consultants had advised that the area was extremely hazardous and had failed design standards for safe cycling (it is due an upgrade in time for the Olympics). The case presents another problem with accountability. When asked about the design standards of the road, Mayor Boris Johnson stated that the structure had been implemented before the guidance was published. It is hard to see why the above cases would not be considered as valid grounds for corporate manslaughter charges and, unless I am mistaken, none qualify for exemption. The beacon of accountability is an ever-diminishing light. At time of writing, no charges have been brought in the case.
Justice is a shaky entity in systems that favour Goliaths over Davids. Decentralised safety services are problematic in delivering such justice but it cannot be that due to devolution of responsibility, accountability can be swept under the carpet by smart talking corporate lawyers. To encourage business owners to meet their health and safety and governance responsibilities robust deterrents need to be upheld and negligent companies held to task. There are, of course, arguments for culpability to lie with both the organisation and the individual. Often it is the actions of a number of responsible individuals, from policy makers to policy undertakers that cause an incident, and apportioning blame can prove contentious. If an individual is ultimately held responsible they may not have the means to effectively repair the damage done. Conversely, it is unacceptable for individuals to feel that they are not culpable for their own actions
Between 1992 to 2005 (prior to the Act) there were 34 prosecutions for work related corporate manslaughter in England and Wales but only six small organizations convicted. Clearly that system was not working. What is important now is to ensure processes of the Corporate Manslaughter and Corporate Homicide Act are tight enough to tie loopholes in the system and not allow it to become the next on the list of laws that oleaginous corporations laugh in the face of.
How has the culture of ethical business changed in the last 25 years?
I am not sure it has actually changed. Companies have simply recognised the need to be more explicit about doing business ethically.
Major developments have been that companies now, in the main, provide guidance to staff about expected behaviours, ways of handling certain situations and so forth, usually in the form of a code of ethics/business practice. This has happened because the ‘job for life’ syndrome where one would learn alongside another employee about how the company worked no longer is the case. People switch careers or companies more frequently and have more diverse backgrounds than 25 years ago, so they need to understand more quickly how the company operates.
What has been the toughest challenge of your career?
The toughest challenge has been to do the right thing even if it meant I went out on a limb! It is rewarding though when doing so is recognised subsequently as having been the right thing to do.
What do you consider your career high points and/or your greatest achievements?
Finding myself at the Institute of Business Ethics which combines my interest in business, seeing it run successfully with education and encouraging people to share best practice – all within a charitable not-for-profit organisation.
If you could set one piece of global legislation to make businesses work more ethically what would it be?
I think if companies had to state in their memorandum and articles of association when they set themselves up how they are going to conduct their business (not just what the company is going to do), a benchmark would be set to measure that company’s performance.
What are the main factors that attract people to working with the IBE?
We are a small, friendly team who work closely with our subscriber base and others who share an interest and passion for the subject. Every day is different so there is no time to get stale!
In terms of ethics, what are your greatest fears for the UK business community?
I fear that cynics will never acknowledge the good that business does and the way, in the majority of cases, that businesses behave. Businesses and companies are human societies in themselves, with well and poorer behaved individuals making up the whole. Sadly, there are some rotten apples but to judge all by the few is unfair.
And your greatest hopes?
My hope is to prove the cynics wrong through businesses providing goods and services and conducting themselves in an open and fair manner that earns the respect and trust of the wider community.
How has the IBE utilised new technologies to progress its work and message?
We have Twitter and Facebook pages and regularly update and review our website; always looking for new ways to improve communication with our subscribers and others interested in the subject. During 2012 we will be introducing webinar events to reach out to those unable to attend our events in person.
The response to the Bribery Act from the business world has been well documented; but from your own point of view, what have been the most significant contentions and concerns with adhering to the legislation?
The legislation, for the most part, is common sense if you wish to stamp out bribery and corruption, which the business world needs to do as it is so corrosive. The most difficult element is how to say ‘no’ to a facilitation payment when you are at the front line and a lot hinges on whether you pay or not. This can be made worse if the payment made actually equates to the official’s salary as the local government knows they can get away with such practice.
Do you think the communications regarding the Bribery Act from the MoJ et al have been adequate?
In general, yes, though clearer practical guidance regarding facilitation payments would have been helpful. The SFO has now issued further guidance on this.
What do you see as the IBE’s main responsibilities when it comes to the Bribery Act?
Ensuring that experiences and practical solutions that companies have, relating to the Act, are shared for the benefit of all.
IBE has always fostered strong academic partnerships – how do you hope this will evolve in the future?
We will continue our annual student essay award, which for the last three years has had an Olympics theme of Ethics, Business and Sport, co-sponsored by the Pierre de Coubertin Committee.
We are also doing research into the Teaching of Business Ethics, an initiative co-led with the Institute of Global Ethics, to encourage the standard setters to include a larger element of teaching business ethics in their criteria for evaluation.
Thirdly, we are encouraging higher education institutions to establish codes of ethics, following up from a publication we did with the Council for Industry and Higher Education a while back. This was picked up on again by Lord Woolf in his recent report on the LSE where he concluded that such institutions should have a code of ethics.
For further info about the IBE visit www.ibe.org.uk
View our interview with David Harris, Head of Business Conduct at BAE Systems.
The ‘Broken Windows’ theory championed by former Mayor of New York, Rudolph Giuliani, promotes an ideology where communities will report or fix a broken window, rectifying even the smallest incidents of wrongdoing, thereby instilling similar responsibilities in others and creating a better environment for all. Advocating whistleblowing within organisations follows a similar premise. By fostering a culture of self-regulation and accountability, management can help ensure their staff and business operations are protected.
Whistleblowing is a valuable tool in any organisation’s corporate governance strategy as it empowers employees to act on incidences of misconduct and help maintain a safe workplace, while protecting profits and reputation.
But is whistleblowing ethical? Such conversations provide great scope for dizzying philosophies – but let’s keep it simple for the moment – surely at base level, altruistically reporting wrongdoing must be ethical? The act of whistleblowing can cause a conflict of interest between the personal, organisational and societal spheres. Much of this conflict stems from the context that one views a whistleblower – as someone sharing knowledge of misconduct for the benefit of others or someone who is a ‘grass’ and acting ‘disloyal’ to their organisation.
Public perception of ethics and whistleblowing
Whistleblowing can be a divisive topic and, while most would agree with the value of reporting wrongdoing and condone good organisational governance, external contexts can colour acceptance and perception. There are elements of chicken and egg as attitudes that are encouraged in the work place extend to the street – if businesses promote good corporate governance for all, whistleblowing needn’t be viewed negatively or as solely the preserve of business or community leaders.
In 2007, a survey commissioned by the US Democracy Corps of 1014 “likely voters” revealed that 70% supported whistleblower protections and 40% stated that they would be much more likely to vote for a congress that enacts such legislation. When we vote, use services or entrust our money with banks we want to know that they are secure and working in our best interests (although the latter example might stick in your throat somewhat!). If an engineer at a water sanitation plant in your area uncovered safety issues we would hope they had ample opportunity to report this without fear of reprisal; avoiding danger and incident and allowing for the company in question to assess and improve their practices.
Personal perception of ethics and whistleblowing
The whistleblower is ultimately torn between loyalty to their employer (or the subject of their revelation) and their moral commitment to the law and society at large. Many feel they have the most to lose, at least in the first instance. It could be argued that it is incongruous with human nature to display loyalty to a bureaucratic organisation because it is composed of so many different people. This dehumanising environment could distort the whistleblower’s perception of their relevance within a company or their ability to influence change, thus degrading their sense of responsibility and motivation to report.
As long as the whistleblower is sure that their motivations are sound and that they are confident in the system they should not hesitate to relay such information and be pleased that they are helping to create a safer working environment for their colleagues.
Whistleblowers and the media have enjoyed a somewhat symbiotic relationship. ‘Though agendas and motivations may vary, they share the ambition of exposing wrongdoing and encouraging changes in systems that aren’t working in the interests of those they are supposed to protect. Recent high profile cases, such as the care homes scandal, are excellent examples of individuals reporting for altruistic reasons – but if a whistleblower appears to be seeking a soapbox for public attention or engineering an act of retaliation, it is of paramount importance that the investigative body in question ensures that the case is conducted in the correct way and that a message of intolerance is clear. If an individual feels disenfranchised by their position in the process, to transfer it to the public sphere might seem their best or only option. It’s up to business and community leaders to ensure this does not happen.
Corporate perception of ethics and whistleblowing
Even if an organisation has a whistleblowing hotline in place they should not be complacent when it comes to its usage and communication. If a company doesn’t receive many whistleblowing reports they shouldn’t assume that no news is good news. Read more about communicating your whistleblowing hotline service.In addition, if companies don’t use the data collected from their reports in a progressive manner (analysing trends, investigation and resolution etc) it negates the benefits of the service considerably. Businesses have a responsibility to the public to act on whistleblowing intelligence or risk adverse consequences. They are additionally accountable to the governing bodies of their sector such as the FSA, HSE and of course the Ministry of Justice. Where there are environmental concerns arising from a whistleblowing report, these too must be addressed with the correct authorities.
There are isolated instances where whistleblowing could be considered the wrong course of action in an ethical context; the Republicans branded Bradley Manning, the Wikileaks informant, a terrorist and whipped the media and public into a frenzy regarding breaches of national security. This of course is an extreme case and it is unlikely that whistleblowing cases made in a corporate context will ever mirror this level of drama. But, no matter what size or sector, businesses cannot afford to allow a culture of misconduct and corruption to infiltrate operations.
It might seem obvious as an employee of a market-leading hotline provider to believe in the ethics of whistleblowing – but personal politics aside, it is true to say that individual ethics are born of a culture of ethics and no matter what your personal take on whistleblowing in this realm, that assertion, at least, is undeniable.
To find out how Expolink’s marketing-leading, confidential whistleblowing hotline can help your business click here.
In the next in our series on international whistleblowing and corruption we focus on the fascinating Republic of Cuba. From Batista through the revolutions of Raúl and Fidel Castro to more recent crackdowns on white collar or guaybera crime, Cuba has been, and will undoubtedly remain, a compelling study in politics and political change.
I have a mixed view of reality television; namely that I would like to see many of the phenomenon’s producers, commissioners and ‘stars’ placed into an industrial mixer. But one series did catch my eye recently and that was Channel 4’s Undercover Boss. For those not familiar with the premise, a CEO or person of similar standing within a high street brand goes ‘back to the floor’ to discover why their business is failing. They don’t get the nous of the fiery-headed Mary Portas or the like, but they do tend to come away with a raft of extremely useful insights and recommendations on how they can improve operations, thanks to their ground floor staff who face the brunt of these issues every day.Decentralised organisations are hardly rarities in today’s global business culture where the span of control is as wide as the country areas covered, but fundamental to the success of any business is that strategy and communication are maintained throughout. Decentralised organisations enjoy the input of multiple stakeholders and are often subject to the conditions of many different international laws. Each department will have requisites relating to its own operations and, with Expolink’s Hotline service, it is important that each is consulted from a very early stage. With multiple stakeholders involved, you must ensure all parties are engaged and understand the importance of their contribution to the success of the Hotline.
Of the many advantages of maintaining a decentralised business one of the greatest is the scope for collaboration and input across the board. The challenge is to ensure that by having so many contributing agencies your message and strategy does not get diluted as the information percolates throughout.
As your trusted whistleblowing service provider we would like to offer some advice when considering how best to manage the service in a decentralised organisation.
In the next in our Q&A series we get the benefit of Fraser McLaren’s considerable expertise on risk management in the global market place, compliance, the ubiquitous Bribery Act and more. Fraser McLaren is Head of Business Risk at Centrica.
Tell us more about the challenges a global organisation with suppliers all over the world face in terms of risk management.
Centrica has an increasing portfolio of supply and service arrangements in offshore country locations such as India, South Africa, Poland and Portugal. Offshoring carries a number of risks including exposure to political risk, natural disasters or breakdown of critical infrastructure. The impacts of these risks can be varied, but could include supply shortages, price increases or damage to the company’s brand and reputation. We manage risk at all stages of the supply chain from checking whether potential suppliers meet our corporate responsibility criteria, ensuring adequate contingency arrangements are in place during the contractual phase and monitoring them through news feeds, country alerts and other third-party and supplier intelligence.
We regularly review country risk and have contingency plans in place to ensure that, at a potential time of chaos, we’re able to protect people and, financial and physical assets in the supply chain. We also take a very proactive approach to supplier risk, particularly in light of global economic conditions, including regular financial health-checks of our key outsourcing partners. We’re also recognised as thought leaders in the development of outsourcing/offshoring best practice by the National Outsourcing Association and have picked up three awards in the last three years. The latest award came at the European Outsourcing Summit, where we were presented with the ‘BPO Contract of the Year Award’ for our partnership with our outsourcing partners EXL.
What compelled you to employ a confidential, independent Whistleblowing Hotline, and in particular, Expolink’s?
Centrica is committed to operating professionally, fairly and with integrity wherever we work in the world and we have a set of business principles which set out the behaviour and standards we expect from all employees. If employees do have any concerns about any possible improper, unethical or illegal practice within the organisation, we want to know about it as soon as possible. While we encourage staff to raise any concerns in the first instance with their line manager, we recognise this might not always be possible and that’s where Expolink comes in. We officially launched the service back in 2007; since then I’ve worked with the Expolink team as we’ve changed the way we transfer data between the two parties and also developed a number of new and innovative ways of keeping the service visible.
Where does the Hotline fit in with your compliance strategy and what benefits have you noted?
Compliance is just one strand of our overall business principles that set out the standards we expect and which all employees must work to at Centrica. We actively encourage staff to share their opinions, ideas and concerns, be it through team meetings, briefing sessions, at events or even through suggestion schemes. Overall, I think that staff do feel they can do so openly and our internal employee engagement scores and high entries in externally Best Place to Work competitions suggest we’re getting things right. The hotline is another method open to employees to raise any concerns they might not feel comfortable raising through another channel. The outcomes of the investigations into any allegations raised via the hotline have also led to a number of business changes including improvements to security measures and a review of some sales and expenses processes.
How do you communicate/market the Hotline service throughout Centrica?
In line with best practice outlined in the Whistleblowing Code of Practice, we regularly promote awareness of the hotline. Examples are displaying posters, articles on our internal intranet, reminders on plasma display screens throughout our calls centres, making sure the hotline is covered in our employee induction material, printing the hotline number on name badges and carrying out periodic surveys to test people’s awareness of and confidence in the hotline arrangements and then publishing those results. We also took the opportunity to raise awareness of the line and promote the value through our anti-bribery communications programme.
As a global organisation what impact do you think the Bribery Act could have on Centrica?
If anything, the arrival of the Bribery Act has underlined the importance of the hotline. The first of Centrica’s business principles deals with ‘integrity in corporate conduct’ which commits us to implementing anti-corruption policies and procedures. Our second business principle ‘ensuring openness and transparency’ commits us never to engage in bribery, any form of unethical inducement or payment including facilitation payments and ‘kickbacks’. We expect employees to report actual, potential or suspected corruption in Centrica or by any individual or organisation Centrica does business with.
Section 7 of the new Bribery Act which introduces the offence of failing to prevent bribery has implications for all commercial organisations. Although as an organisation we always endeavour to operate ethically, the new legislation resulted in a significant piece of work taking place in developing adequate procedures. Centred on the 6 principles outlined in the UK Government guidelines this included embarking on a detailed risk assessment programme across the business, updating group policies, introducing even more stringent due diligence processes, especially concerning supply chain and mergers and acquisitions, and reaffirming our measured approach to gifts and hospitality. An eLearning training package was also developed and successfully delivered.
What are the key tools for identifying business risk in the energy sector?
There isn’t one key tool for risk identification, and these identification methods aren’t unique to the energy sector; there are a number of different methods of identifying risk. These might include workshops, brainstorming exercises, interviews with key stakeholders, the use of checklists or benchmarking with other organisations. More recently, and perhaps linked to the pace of change in the external environment, for example events in Japan and North Africa and well-publicised cyber attacks, we’re tasked with bringing more of an external challenge to our risk profile. This can be done in a number of ways, for example reading news articles or attending industry benchmarking or discussion groups.
As Europe becomes more integrated, working practices change fast and often affect more than one country at a time. How do you keep abreast of what affects you and your company?
It’s important that Centrica gives proper consideration to the risks inherent in sourcing services from a variety of locations around the globe, not just in Europe. We try to ensure processes are in place to monitor potential threats to the delivery of products or services to our customers. This includes monitoring elections, changes in executive and legislative power, labour union activities, internal politics and regulatory stances, as well as international relations. We also have a cross-group committee that meets regularly to discuss emerging risks and to develop a consistent approach to managing supplier risk in the company. The increasing focus on our corporate responsibility obligations and commitment are also drivers for building a cohesive approach.
What is the split between energy regulatory compliance risk management and generic operational risk? And has this changed over the years?
Centrica and the energy sector in general, are subject to significant levels of regulatory oversight covering issues such as retail competitiveness and energy market reform. The picture can be even more confusing in North America where legislation or regulation can vary by state and province. To help mitigate these risks, we develop internal policy, and externally, engage with government, regulators, parliament and media to help build knowledge and understanding among our key stakeholders. Compliance risks are picked up as part of our wider operational risk process, but they also receive additional scrutiny from the general counsels of each of our main business units.
If you could give one bit of advice to a counterpart in risk, what would it be?
Keep the process simple. The real value of risk management comes not from the process itself or any complicated assessment methodology, but from the conversations that take place to review these risks.
Scott Bridgen, Hotline Sales Manager at Expolink, will be presenting a seminar on Whistleblowing as an External Service at the Smaller Government Bodies HIA Forum on 15th July IN Southampton.
The forum is hosted by Ordnance Survey Risk & Assurance and provides a comprehensive symposium on corporate governance in modern business. Scott will be talking about common misconceptions and myths surrounding whistleblowing in the workplace, how to position whistleblowing and the importance of effective communication within an organisation – making whistleblowing work.
Other speakers include Geoff Jennings of the National Anti-Fraud Network, Mike Doughty, Head of Internal Audit at Natural England and Alan Kenah and Ian Grant of Dstl.
We invited Tony Kelly, Group Head of Health and Safety at IPF, to air his views on international safety operations and its associated challenges faced and ethical business practice.
With regard to safety, since the company was established what major changes have you noticed in the home credit loan market and the business culture surrounding it?
Like any business where the majority of its workforce is operating in the street and customers’ homes, the challenges faced by our people change according to societal shifts. The business has only been operating for four years as an independent entity so in terms of witnessing social change I think differences are slight.
From the start, IPF made a commitment to providing a safe workplace for all of its people and that has never changed. What we have done is spend time looking at safety management models from world-class organisations and determining how we can modify existing best practice to match our needs as well as building on our own best practices. IPF prides itself on Corporate Social Responsibilty and ethical business practices and safety is an integral part of that.
As Europe becomes more integrated, working practices change fast and often affect more than one country at a time. How to you keep abreast of what affects you and your company?
There is a head of safety in every market in which we operate and I am in the head office. We work as a global team sharing developments and practices. Each of us monitors the local law along with our company lawyers and corporate insurance companies.
That’s quite a network, so changes such as Romania’s adoption of EU standards earlier this year, become known to us all very quickly. I have tried hard to foster a team ethos of constant communication using any and every method from SMS messages to video conferencing and quarterly workshops. In fact we are exploring opportunities to use our own accident incident management database, built on technology supplied by Expolink, as a type of sharepoint for safety. Not least we are a team of global travellers (I am on first name terms with KLM cabin crew!!!) so word spreads very quickly.
What health and safety challenges do you find the most prevalent when the organisation is looking to open offices in a new country?
In every walk of life there is a tendency to fall into two traps; the first being that whatever happens in our own lives is unique to us and second is the assumption that because we don’t know about something then we presume it doesn’t exist. In terms of safety, those false assumptions could lead someone to believe that a new market won’t have safety laws equivalent to UK standards simply because in other respects the country seems less developed than our own.
In fact most, countries have very similar safety laws by virtue of being members (or aspiring to be members) of international quasi-states such as the EU or by establishing government targets to render economies sustainable as in Abu Dhabi or China. And of course providing safety to people is only humanitarian ethics in the final analysis and that is a worldwide trait; no decent person would ever wish harm on another, immaterial of where they live.
The challenge therefore is to make sure you get a copy of the local safety law in a language you can read and then do a thorough comparison to international standards such as OHSAS 18001 to establish some ground-truth.
With such a large and diverse workforce what impact, if any, do you think the UK Bribery Act will have on your organisation?
Wow that’s a question not normally asked of a safety practitioner! What I can tell you is that we already have a Code of Ethics and policies and procedures aimed at preventing bribery and corruption. With no complacency at all, we are confident that we do not have a problem with corruption in our business.
The Bribery Act will, perhaps, make people think a little harder about their conduct and will also provide us with an opportunity to revisit our current policies and procedures. We will also carry out further risk assessments and take the opportunity to ensure that our workforce’s knowledge and awareness of bribery and corruption is as good as we would want it to be.
With countries that have different HR and operational practices to the UK, what are the biggest risks to the workforce and how do you best assess and manage these?
As previously mentioned, the differences are generally pretty subtle in corporate practice. We are a global company with global standards so working conditions for our own people are pretty uniform across the group. We are rolling out global training and education schemes so wherever you are you will have had the same core skills delivered to you. The market heads of safety and their teams work to localise elements to face particular risks. Often these reflect nothing more complicated than the environment or climate.
Poland is pretty chilly in winter but in Mexico snow is something largely seen only in films, so we tailor our safety skills and communications to the target audience. We assess environmental risks at a micro-scale right down to the patch of ground covered by an individual sales agent and then these are used to form risk maps at every successive layer right through the whole group. To understand this concept, consider your own neighbourhood. Where I live is an inner city pedestrianised area with high-rise apartment blocks, lots of bars, a canal and fancy marble flooring. Where I used to live was rural with a major road of fast-moving traffic nearby. The risks associated with living and working in those two areas are clearly massively different. We then map those and build layers of what I call risk pixels into a picture for a country showing the hotspots and safer areas. We monitor and review these risk maps regularly and that’s a useful tool for educating new workers and for looking at the risks for any business expansions. I believe vehemently that risks are best assessed by those that face them and, with intelligent guidance, it is local workers who generate the best mitigation plans.
So I don’t see a single biggest risk across the group; I see single biggest risks for each neighbourhood and worker. In terms of operational practices, nobody in their right mind ever looks to get hurt and one of the things I’ve learned from thirty years of working around the world is that people are the same everywhere; they just need to be shown a better way and they will quickly adopt it. We work as a global team sharing good practice which we introduce wherever we find a gap, so homogenising operational practices is not as hard as you imagine.
How do you encourage best ethical business practice internationally?
Achieving this is like pushing on an open door. I’ve worked in all sorts of places from Afghanistan to Norway and superficially you couldn’t imagine two different places. What I have learned is that the fundamentals of ethical and social mores are the same the whole world over. We capitalise on that by showing people the positive benefits of striving for the highest ethical standards that can be achieved.
Engagement, morale, operational effectiveness and well-being all grow when a business unit is run ethically and well and that’s quickly spotted by anyone who sees a standard higher than their own. That’s our business ethic, so therefore it’s our business case for insisting our ethical standards are global, internally. Of course, as I have described, the law ain’t so very different anywhere and that provides our legal argument for insisting on compliance.
Externally, we run Corporate Social Responsibility programmes in every market in which we operate and our in-house safety mentors (like a Six-Sigma Green belt but for safety) and full time practitioners are often at the forefront of them. They can vary from helping children’s homes to education programmes at colleges and schools, all to spread the concept of ethical practice and safe working wherever we are operating.
