Whistleblowing in 2016 – A Practical Guide For Compliance Managers

Complyport, ComplySci and Intersol Global are thrilled to have partnered for this Whistleblowing webinar on 12 July  2016
Contributed commentary; ComplySci

Whistleblowing in 2016

This subject is clearly top of mind for many compliance managers as over 200 professionals registered last Thursday 12 July to hear about the challenges and potential solutions to whistleblowing in today’s dynamic and volatile markets. In this highly interactive webinar, three eminent experts came together to share their insights:

Ronald Gould, Chairman, ComplySci, Europe
Paul Grainger, CEO, Complyport
Ian Hynes, CEO, Intersol Global

Comparisons Between How the US, UK and the EU Approach Whistleblowing

Whilst there are many similarities there are also some clear differences. The EU have been searching for common ground across the region. The UK first implemented rules to specifically deal with whistleblowing back in 1998 with the Public Affairs Disclosure Act.

The US approach has traditionally been based around offering large financial incentives to attract whistleblowers. This has not been adopted in the UK but is increasingly being considered as an option. Although research by the FCA has suggested offering large financial incentives, there is a belief that may not increase the number of whistleblowers and FCA has indicated it will not offer financial incentives in the foreseeable future.

The EU and FCA are now implementing regulations with specific references to whistleblowing in MAR (Market Abuse Regulation) and the SMR (Senior Managers Regime) in an attempt to provide much more protection for whistleblowers. Part of the new regime specifies the need for all FCA regulated firms to identify a “whistleblower champion” that can help potential whistleblowers feel more protected if they disclose regulatory breaches and wrong doings.

This process has still yet to be properly tested though and history is not supportive of a good outcome for the whistleblower which all agreed is still not a healthy situation. Examples were given of high profile fraudulent corporate cases where the question was asked why there was no whistleblower and other cases where there was a whistleblower, but the individual had not prospered since. So despite all the increased protection the question still remains what happens to the whistleblower after the whistle has blown?

The role of the Compliance Officer in a whistleblowing case was discussed in that compliance will be in most cases the first responder or first port of call for a whistleblower. This situation, however, can often create a potential conflict between the required statutory duties of the Compliance Officer against the potential impact on the firm.

What are the Key Ingredients of a Strong Whistleblowing Policy in a Firm?

Firms can have a good process on paper, but the effectiveness of the process is tied to the quality of the execution and having the right people asking the right questions at the right time. Some valuable techniques were shared about approaching a whistleblowing situation in a firm, particularly around the interviewing of key witnesses and stakeholders, including the UK’s Serious Organised Crime and Police Act (SOCPA) process for handling whistleblower investigations.

The webinar concluded by coming back to the whistleblower champion concept now in the implementation process to go live this September 2016 and how this can encourage whistleblowing by giving the appropriate level of protection and anonymity. It’s a big step in the right direction, but the question was asked, is it enough?

If you missed the webinar, please listen to the recorded session and download the slides here.