Deloitte’s latest report highlights need to do more to address the evolving role of whistleblowing

BANDAR SERI BEGAWAN, 23 June 2023 – Deloitte today released its inaugural Asia Pacific Conduct Watch Survey report, in conjunction with World Whistleblowers’ Day, which uncovers how whistleblowing now goes beyond traditional fraud and misconduct detection, but also drives better corporate culture and fosters a positive work environment.

In response to this evolution, organisations need to align their priorities with their stakeholders’, address employee concerns, and implement appropriate metrics to measure the success of their whistleblowing strategies and ensure the effectiveness of their whistleblowing frameworks.

The report, based on survey findings from across Asia Pacific, offers insights into the attitudes and capabilities of organisations towards whistleblowing, in the context of the rapid changes in the workplace, remote working trends, increasing financial pressures, and rising expectations from regulators and society.

The survey, conducted between 31 March 2023 and 1 May 2023, received responses from over 500 organisations throughout the Asia Pacific region, including Japan, Korea, China, and Southeast Asia. Survey respondents spanned over 10 different industries and ranged from organisations with less than 1,000 employees to those with over 50,000 employees.

Key report findings

The scope of whistleblowing continues to evolve and expand, reflecting the changing dynamics of the corporate landscape. Changing work practices and cultural norms have impacted the purpose and use of whistleblowing. Some 70% of respondents see whistleblowing as a means to improve an organisation’s culture of ethics and integrity, 66% see it as a way to detect fraud and other misconduct, and close to 60% see it as a strategy to foster a positive and transparent working environment.

While fraud and conflicts of interest still represent a significant proportion of disclosures, whistleblowing channels are increasingly being used to report concerns related to people matters. This emphasises the evolving role that whistleblowing plays in addressing broader issues in the workplace.

Aligning priorities between an organisation and its stakeholders and fostering accountability is crucial for successful whistleblowing programs. While 58% of respondents indicated that whistleblowing was a high priority within their organisation, less than half of these respondents felt that the overall responsibility for whistleblowing rests at the board level. This indicates a gap between the importance of whistleblowing and the level of responsibility attributed to it.

The overall responsibility for whistleblowing should be attributed to the board, due to the board’s crucial role in promoting a culture of integrity, transparency, and accountability. The board also has the responsibility to set the tone for ethical conduct and establish an organisation’s values and expectations.

Employees’ mindsets and level of awareness pose major challenges for the implementation of whistleblowing programs. Sixty percent of employees are concerned with the independence of reporting processes, 58% lack awareness of whistleblowing programs, and 42% fear retaliation against them.

Thus, establishing an independent whistleblowing process with well-communicated policies and procedures is critical in building trust among employees and is key to an effective whistleblowing program.

Organisations need to employ the right metrics to measure the effectiveness of their whistleblowing programs. A third of respondents indicated that they do not measure the effectiveness of their whistleblowing programs, although close to 40% of them highly prioritise whistleblowing. Among the 70% that evaluated the effectiveness of their programs, 30% relied solely on the number of disclosures received to do so. Report volume is often used to measure the overall willingness of employees to report wrongdoing. However, the number of reports does not provide an accurate picture of the effectiveness of whistleblowing programs as it does not show the reasons behind reports of wrongdoing, or lack thereof.

Hence, selecting the appropriate metrics to measure the success of whistleblowing programs is vital. Such metrics may include awareness of whistleblowing policies, accessibility to reporting channels, whether stakeholders trust that they will be protected, and whether disclosures are investigated on a timely basis.

Raising the bar for whistleblowing in Asia Pacific

Deloitte has observed that whistleblowing is increasing in importance and priority in Asia Pacific. With growing recognition of the crucial role that whistleblowers play in exposing wrongdoing and promoting good governance, organisations throughout the region are recognising the importance of establishing strong whistleblowing programs.

“Organisations willing to take the lead in implementing robust whistleblowing frameworks will foster trust among their stakeholders and detect and address potential risks and misconduct that may affect their reputation. However, organisations that do not prioritse whistleblowing may find it increasingly difficult to differentiate themselves amidst the competitive business landscape. It is critical for organisations to enact robust whistleblowing policies that ensure corporate governance while cultivating accountability, transparency, and ethical behaviour,” said Mr OO Yang Ping, Deloitte Asia Pacific Conduct Watch Leader.

Methodology

From 31 March 2023 to 1 May 2023, Deloitte canvassed the opinions of business leaders across Asia Pacific with oversight of their organisations’ whistleblowing policies. The online survey gathered insights on organisational capabilities and attitudes towards whistleblowing. Drawing from our experience in providing independent whistleblowing services to more than 300 organisations over two decades, the survey was designed to gather information on organisations’ whistleblowing strategies and culture, policies and procedures, implementation and execution, and reporting and monitoring.

To reflect the diversity of the Asia Pacific region, the survey was made available in multiple languages, including Japanese, Korean, Simplified Chinese, and Traditional Chinese.

The report covers four key areas:

Strategy and Culture: The report examines the strategic approach and organisational culture surrounding whistleblowing. It emphasises the importance of aligning priorities between the organisation and its stakeholders, and fostering a culture of transparency, accountability, and ethical behaviour.

Policies and Procedures: The survey sheds light on the policies and procedures implemented by organisations to support whistleblowing. It highlights the need for robust frameworks that protect whistleblowers and encourage reporting.

Implementation and Execution: The report evaluates the effectiveness of organisations' implementation and execution of their whistleblowing programs. It identifies challenges and provides insights on how organisations can enhance their practices.

Reporting and Monitoring: The survey delves into the reporting and monitoring mechanisms adopted by organisations to ensure the effectiveness of their whistleblowing programs. It emphasises the importance of selecting the right metrics to measure the program's impact.

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