Cambridge Analytica, MeToo movement, Theranos, The Trump Whistleblower and other stories of whistleblowing have been the key to forcing cultural changes. For organizations, primarily corporations, whistleblowing is becoming more accepted as an early detection tool for violations.

Meanwhile, for the whistleblowers, the whistleblowing system is not always robust enough to keep them from retaliation. As a supporting action for #FraudWeek, we would like to take this opportunity to share with you the importance of whistleblowing culture to enhance the efficacy of the internal whistleblowing system.

A study entitled Evidence on the Use and Efficacy of Internal Whistleblowing Systems found that whistleblowers play a crucial role in cleaning up and shaping a company’s financial and corporate culture. Through the report, Kyle Welch of George Washington University and Stephen Stubben of the University of Utah wrote a detailed analysis of over ten years’ worth of records from NAVEX Global, which monitors whistleblowing and incident reportings for 8,500 companies.

Also read:

Whistleblowing: Why The Safety and Anonymity of the Whistleblowers do Matter

Whistleblowing: A few Calls do not Mean your Companies Safe

How Whistleblowers Pushed the US President Into the Brink of Impeachment

A corporation that lacks a whistleblowing culture often ignores, mishandles the report, or even jeopardizes the whistleblowers’ safety. These are some of the discouraging factors for whistleblowers to report their concerns.

Therefore, building a whistleblowing culture is as important as having the system in place. Whistleblowing culture includes a transparent culture that encourages reporting. In a transparent culture, when the violation is revealed, the leader shares the information about how the corporation handles the matter and why control should be improved to prevent the same violation from occurring in the future. By doing so, the whistleblowers would feel that the corporation listens and takes their concerns solemnly.

Besides being culturally transparent, the corporation should also ensure that the whistleblowing system protects the confidentiality of the whistleblowers. This fosters trust so that the whistleblower feels secure enough from any form of retaliation to report his/her concern.

The study found that the more internal reports received by the corporation, the more accurate the corporation examines it and the fewer lawsuits the corporation has in the future. This also means that treating whistleblowers as assets, by having a robust whistleblowing system, would reduce the financial and reputational costs of the corporation.

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