You may have seen the return of a familiar name in the news more than a decade after he first hit the headlines because of a controversial government deal. In relation to a national broadband deal that the government was supposed to sign with a Chinese telecom company in 2007, Jun Lozada came forward with allegations of bribe taking by high-ranking government officials. He is the one who is facing prison time.
The risk that individuals take when they choose to speak up against unethical behavior is revealed in the story of Lozada. There are many stories of people who have had their lives turned upside down because of pushing back against the wrongdoing of people more powerful than them. It highlights the importance of establishing secure and confidential reporting channels.
There has been a significant increase in fraud and a spike in whistleblowing since the coronaviruses epidemic. According to a 2020 survey by the Association of Certified Fraud Examiners, 81 percent of its member companies reported an increase in fraud, and 90 percent expected a further increase in the next year. The economic uncertainty brought about by the Pandemic, pressure on companies to reduce costs and the sudden shift to remote work all contributed to the spike. It is apparent that a review of whistleblowing solutions may be in order, as the compliance responsibilities of corporations have remained, or even increased, throughout the health crisis.
Dynamic risk assessment is a practical step companies can take to adjust to the new environment. If this is the age of disruptions, then organizations have to periodically refresh and update their risk assessments to be in a better position to respond. Business leaders may want to focus on the highest risk areas to stay on the right side of regulatory guidance.
Communication of the company’s commitment to a safe and healthy work environment is important. People’s awareness and confidence in a program is more important than a program’s quality. Make sure workers are familiar with their reporting channels. It’s safer and more convenient to have assurances that reports will be handled independently, multiple reporting channels, and options to report in the language of their choice. An increase in trust in management’s openness to listen to whistleblowing complaints was noted by one of the companies that we worked with on a whistleblowing solution.
Extending the eyes, ears, and reach of compliance is an action organizations can take. What do you do? By making their program ready for surge capacity by bolstering it. This may involve augmenting in-house investigations with external on-call investigation support. An organization’s ability to detect and prioritize high-risk matters, structure reports for efficient investigation, and gain deeper insight into the types of fraud or misconduct the company is vulnerable to can be enhanced by a third-party provider.
Business leaders can increase their vigilance around risk areas, such as financial fraud, by investing in reliable controls, IT systems and monitoring that protect against these risks. Deeper insights from a tech-enabled whistle blower program can allow an organization to refine its action plan in keeping with best practices. It can assess the risk of complaints early, refine investigation and response protocols, and revisit anti-retaliation policies in ways that are suited to its operations and structure.
Establishing investigation playbooks will help the organization respond to a report when it is lodged. Data collection and preservation, background checks, interviews, and documentation of findings are some of the procedures included in the playbook. Key stakeholders need to define their responsibilities in relation to case-handling protocols. Roles, authorities, and accountability should be understood by everyone in order to avoid reactive handling of issues that could lead to heightened liability exposure.
As disruptions and uncertainties increase and workers become more mobile and dispersed, a secure and trusted whistleblowing program will be even more important in risk management. As businesses begin to settle into their new world of work, it is a good time for business leaders to reexamine their whistleblowing solutions and ask if they are still appropriate given the new realities on the ground. The organization’s commitment to good governance and to protect the people brave enough to speak, do they remain robust?
The author is a senior manager in the risk advisory group of the company. If you have a question, email ldanao@deloitte.com. The company is limited by guarantee and is a member of the firm. They provide services from more than 100 cities across the region, including Auckland, Bangkok, Beijing, Hanoi, Ho Chi Minh City, Hong Kong, Jakarta, Kuala Lumpur, Manila, Melbourne, and so on.
