Anyone who has read a newspaper, spoken to colleagues or taken a look at social media recently will have seen references to the ‘new normal’.
We’re being told that working life as we know it has been changed forever, and that some of the changes that were thrust upon us unexpectedly and at short notice due to the coronavirus pandemic might actually be here to stay in one way or another.
As many businesses continue to navigate the challenges of revised working arrangements for their staff, one important question will be whether their oversight arrangements remain fit for purpose.
Controls that worked effectively in an office-based environment, where face-to-face interaction and supervision was a part of daily life, may suddenly seem less appropriate and effective when translated into a home-based or socially distanced working environment.
A critical part of any compliance programme will be a focus on speak-up culture, ie the ability and willingness of employees to raise concerns if they suspect or experience conduct falling short of the organisation’s values (or, in a worst case scenario, behaviour that might constitute regulatory or criminal misconduct).
Whistleblowing programmes have been a focus for many organisations over the past few years – whether driven by regulatory necessity or simply an appreciation that employees are often best-placed to spot issues and bring them to their employer’s attention at an early stage (a crucial part of the ‘detection’ aspect of the risk management process).
The question for businesses as they navigate the changed working environment, is whether their whistleblowing arrangements remain fit for purpose or need adaptation. That question can best be answered by looking at the data flowing from those arrangements.
An online keynote address given in May 2020 by Steven Peikin, the Co-Director of the Division of Enforcement at the US Securities and Exchange Commission (SEC), offered an interesting perspective on how whistleblowing may have been impacted by coronavirus.
During his speech, Mr Peikin noted that since mid-March the SEC’s staff had triaged more than 4,000 tips, complaints and referrals – a 35 per cent increase over the same period last year.
The increase might be explained by a number of factors:
- First, there is a question as to the subject matter of the reports made and whether they are largely coronavirus-related. It seems that this might explain some, but not all of the reports received. Mr Peikin noted in his speech that in the same (mid-March to May) period, the SEC had opened 'hundreds of new investigations, many COVID-19 related, but many in other traditional areas'.
- Another possibility is that there has been a change in attitude, with more people now being willing to raise concerns. The reasons for any shift in attitude merit exploration in their own right – if there has been a positive change in people’s willingness to speak-up, is that driven by a sense of moral duty, or by the potentially rich rewards available from the SEC for some whistleblowers? (Mr Peikin stated in his speech that, since 23 March, the Commission has issued awards to nine whistleblowers, including an award of over $27m) Alternatively, does the increase in reports correspond to an increase in employees losing their jobs, and feeling that they have nothing left to lose (or a desire to cause disruption to their former employer)?
- The explanation could also lie in a genuine increase in wrongdoing, perhaps driven by either the additional pressures that many businesses and individuals are now operating under or rogue individuals seizing an opportunity that might be presented by reduced oversight and supervision.
Whatever the reason for any change in the number of reports, a clear lesson is that whistleblowing data merits careful analysis and can provide valuable information.
Trends in whistleblowing reports (whether upwards or downwards, or demonstrating spikes or drops in particular business areas or jurisdictions) can provide important indicators as to the areas in which greater attention is required. The trends may indicate a potential compliance issue which needs to be addressed, or that there has been a change in attitude, giving rise to a need for a refresh of the employer’s whistleblowing arrangements.
Notwithstanding the interesting statistics coming from the SEC, some organisations could find that the changed working environment is having a dampening effect on whistleblowing. Assessing the data flowing from their whistleblowing arrangements may highlight changes in the number or type of concerns being raised, or the source of those concerns.
Understanding the possible cause of those changes will be important in shaping the company’s response. A marked drop in the number of concerns being raised may be a positive indicator, or it may demonstrate that employees have become less vigilant or feel less willing or able to raise concerns than they were previously. A change in messaging, or a renewed emphasis on the importance of speaking-up, may be required in response.
On the flip side, any data showing an apparently positive change in attitudes towards speaking up should be considered – is there a reason for this positive change, and does it offer any lessons that can be translated into the employer’s future arrangements so that the positive momentum is maintained?
From a workforce planning perspective, we are moving out of ‘crisis’ mode and towards a stage where the changes to working life look set to continue for some time (and, in some workplaces, may feature more permanently).
This heightens the need for employers to get ahead of any potential negative impact on their speak-up culture, and to consider how their whistleblowing arrangements might need to adapt to the new environment.