‘The five most dangerous words in business may be “everybody else is doing it
“.’ So said Warren Buffett, the billionaire businessman and philanthropist, in a
memo to his top managers at Berkshire Hathaway
And that ‘everybody’s doing it’ is one of the top reasons that staff give for
not reporting misconduct. According to research by the Institute of Business
Ethics, of those employees who witnessed misconduct in their workplace, only a
quarter actually reported it. The main reason staff gave for not reporting their
concerns was fear of alienation from colleagues (21%), closely followed by a
sense that it was none of their business (19%). Fear that their job would be
jeopardised (13%) and that everybody’s doing it (12%) were not far behind.
These results show that much needs to be done if staff are to be encouraged
and feel supported in voicing their concerns. Employee welfare aside, companies
can gain tangible business benefits if they ensure such mechanisms are in place.
Don’t be a victim
Most organisations have already been, or will be, the victim of a fraud or
theft at the hands of their own employees. Recent statistics from Glovers
Solicitors puts the total lost every day by companies to fraud at more than
£40m, and 80% of that fraud involves an employee, so it is critical that
organisations ensure that staff feel they can raise any concerns they may have
about behaviour in the workplace.
An effective speak-up procedure encourages employees to discuss their
concerns internally before going outside, either to the media or the regulator,
and ultimately protects organisations from negative publicity. Bearing in mind
technological developments, particularly the internet, and the huge popularity
of social networking sites, it is now easier than ever for employees to make
their concerns public – and more important than ever for employers to be the
first port of call for unhappy staff.
A speak-up policy sends a strong message to all levels of the business that
bad practice will not be tolerated. It can also reassure employees that their
concerns are important, and encourage problems to be brought to the attention of
management from within the company.
A working environment in which it is made clear that bullying, harassment and
discrimination will not be tolerated could lead to fewer pay-outs at employment
tribunals. Another benefit could be that good employees are retained with
increased staff morale and loyalty. But perhaps the most compelling reason is
that it makes for a happier and more productive workforce if staff believe and
see that a culture of mutual trust exists.
Customers and the public, meanwhile, need to be protected from the effects of
malpractice – for example, breaches of health and safety procedures or a failure
to comply with hygiene standards. Staff often have knowledge that may divert
disasters, if effective speak-up procedures are in place.
It is not enough, however, to set up a phone line and hope for the best. To
reap these business benefits, organisations need to ensure that their speak-up
procedures are effective. This presents the greatest challenge, not least
because of the resistance from all ranks of employees that organisations may
face when setting up a programme.
Implementation of a whistleblowing policy can be part of a culture change
which, although positive, threatens the status quo. Staff may feel cynical about
a new initiative when past experience has meant there is little trust. Middle
managers may view whistleblowers as a threat. Top management often do not
recognise the role of staff in guarding corporate reputation and are the most
susceptible to the ‘say-do’ gap – the gap between what a company says it does
and the reality of what happens in practice.
Given these challenges, it is important that the policy and the reasons for
it are communicated throughout the organisation, alongside a code of ethics that
will help guide staff in their assessments of what is the right thing to do in
If organisations have the courage to be open about the positive outcomes of
raising ethical concerns, this can give staff the confidence to share their
concerns with each other and with the company.
Board-level buy in
The CEO or another senior director should set out the organisation’s
commitment to its speak-up policy. This is a good place to make a statement on
the support that the organisation will give to those who raise concerns in good
Purpose of the policy
This explains what the speak-up policy is, and gives examples of issues
where employees may have concerns.
This section will set out the details of the procedures that
individuals should follow when raising a concern. It should also include a
statement on confidentiality and/or anonymity and encouragement for employees to
speak to their colleagues, line managers or other managers if appropriate.
Staff need to know what they can expect if they speak up. Here, you should
describe the details of the process that the investigation will follow. Set out
the principles guiding the recording and investigating of reports, such as
confidentiality, protection and feedback. What can the employee expect in terms
of timeframes for investigations, call backs and progress reports? It should
also reiterate the company’s commitment to support the employee raising the
List other supporting documents
Typically, this will include guidance for managers, guidance for staff,
code of ethics, posters and desktop reminders that are available. The role of
any call lines/web pages: when to use them and how they can help
Warning of disciplinary action
This is a policy that has to be taken seriously. Outline clearly the
likely outcome for malicious use of the line.
Katherine Bradshaw is office manager at the Institute of Business
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live
Two new audit partners have been appointed at the firm BDO in its audit practice following continued growth and investment
Changes to the tax system is urged to support the growth of entrepreneurs, found a report from the Grant Thornton UK, the Institute of Directors, and the Prelude Group
Six new partners have been revealed by top ten firm Mazars