Enhanced whistleblower protection: New legislation looms In 2018!!

Whistleblowers are one of the most likely means of uncovering fraudulent behaviour, yet the personal cost associated with doing so cannot be underestimated.

There have been many examples of whistleblowers here in Australia and overseas who have paid a heavy price, both personally and professionally, in acting ethically and reporting inappropriate behaviour.

Thankfully the Australian Government has recognised these shortcomings and is set to introduce reforms that will provide confidence to whistleblowers that they will be protected, especially if they are victimised as a result of their actions.

The reforms, likely to apply from 1 July 2018, include:

• Expanding the categories of whistleblowers qualifying for protection to include ex-officers and ex-employees and their relatives
• The inclusion of companies, bank, insurers, superannuation entities and their trustees into the new regime to ensure a more consistent approach across the industry
• Broadening the scope of conduct that may be subject to protected disclosure
• Permitting anonymous disclosures that protect the identity of the whistleblower
• Granting immunity in respect of the information that the whistleblower may provide
• Expanding the protections and redress for whistleblowers including access to compensation in case of reprisal
• Requiring all public companies and large proprietary companies to have a whistleblower policy.

The last bullet point will have implications for a significant number of companies, who need assistance with the development of a policy that adheres to the new requirements.

From a corporate governance and reputational perspective, an effective whistleblower policy helps reinforce a culture of transparency, honesty and accountability within an organisation.

A well-defined whistleblower policy is an effective means of ensuring that employees, suppliers or other stakeholders can be confident in coming forward if they have witnessed something suspicious or unethical.

An effective whistleblower policy will define the types of improper conduct, provide the whistleblower with information as to their course of action and the protections in place.

Many companies use an outsourced whistleblower hotline that provides an independent, fully resourced 24/7 service staffed by experienced investigators who not only provide the right level of support to the whistleblower, but also ensures that the right questions are being asked and appropriate evidence is secured.

From an investigative perspective, following an appropriate course of action is critical as it has been estimated that 22% of whistleblowers lose lawsuits due to a lack of compliance with the law.

The mandating of a whistleblower policy for public and large proprietary companies in 2018 will represent another legislative obligation for larger companies to comply with. Its introduction will however no doubt serve to assist Australian companies identify fraudulent activity and unethical behaviour, which will save the corporate Australia more than what it will cost.