Creating or Updating Your Whistleblowing Policy

11 06 2009

When creating or updating a Whistleblowing policy for your company, there are several factors to take into consideration to ensure that the requirements of anonymity and resolution are met. Although at first glance it may seem like simply setting up a dedicated telephone/fax hotline and an email address and/or web submission is all that is necessary, it is important to analyze the needs of your company and create a policy to fit those needs. Following are some key points to consider when creating or updating your Whistleblowing policy.

Who will monitor the Whistleblowing hotlines and/or email?

Section 2.3 (7) of the CSA’s National Instrument 52-110, states that:

“An audit committee must establish procedures for:
(a) the receipt, retention and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters; and
(b) the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.”

While the Audit Committee must establish the Whistleblowing procedures for the company, they may elect to have a third party receive reports on their behalf. These anonymous reports are transcribed and then sent to the Audit Committee Chair (or another officer within the company, for example the CEO or CFO) for investigation. If the Audit Committee chooses to arrange for the reporting system to be created and monitored within the company, additional concerns regarding anonymity should be taken into consideration. For example, if a telephone and fax system is used, will the call display function be disabled on all incoming calls? If an email system will be used will there be a filter that will remove the senders email and IP addresses? If your company has offices or operations in other countries, you may need to give additional thought to how you will handle reports made in another language and whether or not you will have a designated investigator locally who may liaise with the Audit Chair at the home office.

Confidentiality is of the utmost importance when creating your policy and evaluating an internal monitoring system versus a third party monitoring system may help you to further define your policy requirements.

What issues should be reported through the Whistleblowing system?

Your policy should clearly define the issues that should be reported as a Whistleblower and those that should be addressed through normal complaint channels. For example, if an associate holds information that they believe shows financial inaccuracies and they are not comfortable bringing this information to their supervisor, they may elect to use one of the Whistleblowing options to make their report. However, if the issue is one of harassment, while it is a very serious complaint and needs to be addressed, the appropriate resolution would more likely be for the associate to contact their Human Resources department or in extreme cases local law enforcement. It should be made clear that issues submitted outside of the parameters of your policy will not be investigated by the Audit Committee, but rather will be forwarded to the appropriate department (i.e. Human Resources) for investigation. This will help to ensure that the Audit Committee Chair (or other appointee overseeing Whistleblowing reports) will not be bogged down with issues that should be handled internally.

How will the Whistleblowing policy be communicated to all company associates effectively?

Communication is always a challenge no matter the size of the company. When implementing a new policy ensuring that every associate understands the complete process is imperative. For all new associates, the policy should be covered in their initial orientation and for existing associates a similar meeting (by department or company wide) may be held for the rollout. You may want to consider offering the associates the option to test the system which will allow them to become familiar with it should they ever need to use it. An annual follow up and renewal of understanding of the policy could be done with the associate’s performance review, at the company’s annual staff meeting or by a simple reminder email sent company wide. If your company employs contract associates you will have to consider how you will communicate the policy effectively to them as well. You may want to provide all associates with a wallet sized card which includes a brief overview of the Whistleblowing process and contact information as most complainants will not want to file their report while at work which may compromise their anonymity.

How will a Whistleblower know if their complaint has been received and investigated if they remain anonymous?

The Whistleblowing system is designed to allow those filing a report to remain anonymous. If a report is filed and no contact information is left by the Whistleblower, the investigator may have follow up questions or require clarification on some points in order to move forward resolving the issue. It is imperative that your policy stress the importance of the Whistleblower including as much detail as possible in their report without compromising their identity should they chose to remain anonymous. Some Whistleblowers will provide their contact information and will welcome the opportunity to provide further information, but most will rely on the information they have provided as being sufficient.
If a report is received and an investigation leads to the need for further information, the company may want to consider having informal meetings for all associates (in small departmental groups or company wide). These meetings can be used to discuss the issue and gain further insight from associates who may not have realized that they hold valuable information or it may lead to a follow up report from the initial Whistleblower providing additional details. While holding such meetings will not be appropriate for many situations, it may be beneficial in certain cases.
In the event that a report is received, investigated and resolved, the company may choose to inform all associates of the report received and the outcome of the investigation by email, company meeting or other means. This will let the Whistleblower in particular know that their complaint was taken seriously and may instil confidence in all associates that their Whistleblowing system is effective.

Will you make your Whistleblowing policy public?

Although publicizing your policy does create more transparency you need to consider the potential of false, uninformed claims as well as a possible public reaction by a complainant who doesn’t understand what the process is and who may feel that their situation has not been investigated thoroughly. Rather than publicizing your policy and how to make a complaint, it may be beneficial to have the investor relations representative provide the Whistleblowing information to a complainant as it is requested. The IR representative should have a good understanding of how the policy works and be comfortable explaining it to a potential complainant who may not be entirely familiar with the company. You may also want to consider maintaining your Whistleblowing policy separate from any other company policies which will be displayed on your website or filed on SEDAR (i.e. Code of Conduct or Governance Policy).

For more information on the services that we provide, including Whistleblowing, please view our website or contact us.

You may download a copy of this information for future reference HERE.


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