There are countless examples in recent news highlighting the potential for far-reaching consequences when wrongdoing goes unchecked, and when whistleblowers face unbridled public scrutiny. Safety hazards could result in serious injuries or even further loss of life and financial penalties and reputational damage could be significant. By protecting whistleblowers, taking their concerns seriously, and even providing them with monetary incentive, corporate boards can utilize whistleblowers as an effective mechanism to promote their companies’ success from within and protect the communities that they serve.

As Jackson Lewis attorneys Lindsay Dennis Swiger and Christian Clark highlighted recently in an article titled “’Knock on our door before we knock on yours:’ Recent DOJ Trends | Corporate Governance & Internal Investigations Advisor (corporatecomplianceadvisor.com),” the United States Department of Justice is implementing a pilot program to monetarily reward employees who “blow the whistle” on their employers in efforts to help the DOJ root out and punish white collar crime. As we have seen, recent whistleblower cases underscore the immense pressure whistleblowers can face, raising questions about the emotional toll and potential for retaliation, and they also underscore the importance of taking a “boots on the ground” approach to rooting out safety concerns and wrongdoing. It appears that, realizing this, the government is now taking a more proactive, as opposed to reactive, approach.

It is now more important than ever for corporate boards to also be proactive in approaching whistleblower policies. The onus is now on corporations to take the lead in promoting whistleblowing from within by not only monetarily incentivizing it like the DOJ, but by strongly supporting whistleblower wellbeing and mental health through upholding and implementing good internal whistleblower policies and protections. This is especially true considering that mental health and personal wellbeing are too often overlooked, and providing support in those areas offers an incentive that money alone cannot buy––peace of mind.

Strong corporate governance relies not just on established rules and procedures, but also on a culture that encourages transparency and accountability. In this context, whistleblowers—employees who report suspected wrongdoing—emerge as vital allies in safeguarding your company’s reputation and long-term success through uncovering hidden risks and protecting public trust.

• Unearthing Concealed Issues: Elaborate schemes to conceal misconduct can evade internal audits. Whistleblowers, with their firsthand knowledge, can expose hidden issues like financial fraud, safety hazards, or environmental violations. This exposure allows for timely corrective action, mitigating potential damage, and preventing legal ramifications.
• Deterring Misconduct: A well-defined whistleblower program sends a clear message that ethical behavior is paramount. When employees know they can speak up without fear, potential misconduct is deterred before it escalates into major problems.
• Promoting Transparency and Accountability: When whistleblowers expose wrongdoing, it shines a light on potentially flawed practices. This transparency fosters accountability to stakeholders—investors, employees, and the public.

Key Features of Effective Whistleblower Programs

To leverage the power of whistleblowers and strengthen oversight, consider these key features for your company’s whistleblower program:

• Multiple Reporting Channels: Provide various avenues for employees to report concerns, including hotlines, online reporting systems, and designated individuals within the company.
• Confidentiality and Anonymity: Guarantee that employee identities will be protected throughout the investigation process to the extent permitted by law.
• Anti-Retaliation Policies: Implement clear policies that strictly prohibit retaliation against whistleblowers who come forward in good faith.
• Impartial Investigations: Ensure investigations are conducted by neutral third parties to guarantee impartiality and build trust within the organization.

Whistleblowers are not adversaries; they can be valuable allies in your pursuit of strong corporate governance. By actively encouraging and protecting whistleblowing within your organization, you empower your employees, and safeguard your company’s future. The detrimental effect on whistleblower wellbeing is likely to have a chilling effect on whistleblowing; therefore, it is imperative that companies continue to strengthen their approach to safeguard these individuals and the whistleblowing procedures.

Beyond Legal Protections: Building a Culture of Open Communication

While legal protections are essential, fostering a culture of open communication is equally important. This means:

• Leadership Commitment: Board members and senior leadership must visibly demonstrate their support for the whistleblower program. This sends a strong message about the company’s values and encourages employees to speak up.
• Training and Awareness: Educate employees about the whistleblower program, its procedures, and their rights. This empowers them to identify and report potential misconduct.
• Open Communication Channels: Create opportunities for employees to raise concerns beyond the formal reporting channels. This allows for early identification and resolution of potential problems.

Conclusion

By establishing a robust whistleblower program with strong legal protections, fostering a culture of open communication, and including other incentives, such as money, employees will continue to be empowered to take ownership of their roles within a company. This ultimately strengthens corporate governance, prevents costly lawsuits, safeguards the company’s reputation, and ensures long-term success.