Thought leadership for the emerging whistleblower environment

Article

Thought leadership for the emerging whistleblower environment

Forensic Foresight: February 2017

The Australian financial sector is the subject of a highly politicised debate, in which its critics accuse it of inappropriate business practices and of failing to properly address whistleblowers allegations. There have been numerous enquiries into banking practice.  In response to public and political concerns the Australian Bankers’ Association conducted a review comparing seven Australian banks’ policies and procedures in relation to whistleblowers against best practice. The authors of the review suggested banks should not wait for legislative reforms before proceeding with improvements. Indeed, it was suggested banks would benefit from being seen as leaders rather than followers in strengthening their whistleblower programs1.

It is expected stringent legislative controls in relation to the management of whistleblowers and their information will be introduced within 18 months. Quotes attributed to the heads of regulatory authorities suggest financial institutions are expected to adopt a proactive stance in responding to future allegations of misconduct.

Proposed future legislation will likely incorporate similar provisions to those contained within the Fair Work (Registered Organisations) Act 2016. Assented to 24 November 2016, it broadens the range of people who can make disclosures and expands remedies available to whistleblowers so they can pursue compensation, reinstatement to employment, injunctions and apologies. It also extends responsibility to persons for failing to take steps to ensure other persons under their control refrained from taking reprisals.

Deloitte is well placed to assist clients respond to these challenges. It has extensive industry experience, having built and provided whistleblower services since 2004. Deloitte now assists over 100 clients across a variety of industries. Over 30 of those clients are in the ASX top 200 companies. Deloitte can also provide a range of high level skills in risk and forensic both in Australia and worldwide.

Although the legislative and political focus is on managing whistleblowers, experience shows effective remediation is best achieved through the development of bespoke services most suitable to the industry involved, and integrating those services with the client’s other risk mitigation strategies.

Through the use of technology and attendant expertise in process and control the Deloitte Forensic Team are able to assist the financial sector in ensuring the effectiveness of their internal processes for managing whistleblowers and their information, from initial receipt to assessment, investigation and determination.

Ultimately, the systems employed must demonstrate replicability and transparency and produce fair and consistent outcomes through an appropriately managed and integrated service.

In the new year Deloitte will release a more extended piece of analysis with developments in the whistleblower legislation and practical implications.

1. Review of Whistleblowing Protections by Australian Banks. Final Report, prepared for the Australian bankers Association. August 2016, by Promontory Australasia (Sydney) Pty Ltd at page 31.

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