Romanian companies are becoming more aware of the significance of compliance, although, in some cases, the reason is not grounded on the belief of doing business ethically, but rather on potentially high cost of non-compliance.
In pursuance of their concern to implement proper corporate governance principles, a new trend arises. Internal whistleblowing schemes are generally designed as an additional mechanism for employees to report misconduct internally through a specific channel. It supplements the organization’s regular information and reporting channels, such as employee representatives, line management, quality control personnel (e.g.Compliance Officer) or internal auditors who are empowered precisely to report such misconducts.
There is a general perception that whistleblowing is on the rise, for several possible reasons.
First, there is a continuing problem of unethical conduct in business. The recent scandals that have kept the newspaper headlines or the fines applied by competent authorities (such as the Competition Council for cartels and other anticompetitive practices), reveal the firm commitment of the Romanian authorities towards a “waste treatment” of questionable business behaviours.
Secondly, our society is becoming increasingly complex. Companies and interests are evolving and thus, the “old fashioned way” of doing business must rapidly adapt.
Authorities seem to encourage blowing the whistle as a way to promote compliance with laws, relying on the deterrent effect of their actions. For example, the online platform managed by the Competition Council enables whistleblowers to provide essential information regarding potential cartel cases.
However, there is a crucial relationship between whistleblowing and the culture of a society. Considering Romania’s communist history, from a subjective perspective, there is still great reluctance towards whistleblowing practices, in spite of active promotion from authorities part. The fear of being perceived as a “weasel” is still deep in the cultural heritage of Romanian people.
In order to mitigate the risk of exposing the “dirty laundry” publicly, by external whistleblowing either to law enforcement authorities or the media, companies have understood that they should firstly ensure all necessary tools for early prevention and management of the matter internally. However, they soon found out that the same social reluctance definitely manifests within their own organization, triggering the lack of effectiveness of whistleblowing arrangements.
Therefore, it is crucial to have the right organisational culture which encourages people to speak out without fear.
An internal compliance helpline may embody different structural shapes, from dedicated phone-lines or email addresses within the company, up to more complex programmes, as internet websites managed by external service providers, part of global compliance hotlines implemented by international corporations.
Regardless of the form companies choose to put in place their internal whistleblowing scheme, the essential element for a successful programme is the anti-retaliation policy, which should encourage employees to report their concerns and support those who do. The programme must be construed in such a manner as to guarantee the whistleblowers’ confidentiality. The information should be disseminated only on a need-to-know basis within the responsible people managing the programme.
The success of whistleblowing regimes relies as much on culture as it does on policies and procedures. It is crucial for an organization to ensure that, if a report is filed in good faith, the relevant employee will not suffer any disadvantages or reprisals due to such actions.
In their attempt to boost the efficiency of whistleblowing programs, some organizations even considered to reward their employees for revealing wrongdoings. This approach has been heavily debated, whether such incentive mechanism might encourage malicious actions between colleagues and employees might abuse of it by spitefully reporting alleged violations, while also receiving financial benefits. In many cases, the honest belief in moral principles and ethical business behaviour was called into question, as the personal interest appeared to be placed above the company’s best interests.
A final word
There is no “one size fits all” model and the whistleblowing policies may not be deemed as a remedy for all ethical problems. Still, it is a laudable effort.
There are several essential criteria that an organization should consider when implementing a whistleblowing scheme:
Prevent retaliation against employees who honestly express their concerns
Encourage your employees to file reports whenever they have reasonable doubts about bad practices
Implement training sessions to acquaint employees with ethical dilemmas distinctive to your organization
Ensure the confidentiality of the programme and actively discourage individuals from trying to identify who blow the whistle
Take all reports seriously and persuade your employees that you are serious about responding to their ethical concerns
Be fair towards both the whistleblower and the target of whistleblower accusations
Tailor-made your whistleblowing programmes by standardizing as much a possible the responsibilities and the way such situations are handled.
The ultimate goal is to manage the matter internally and prevent public disclosures of alleged organizational wrongdoing.
Article written by Luiza Bedros,Senior Associate, Noerr