Whistleblowing – Cultivating Organisational Trust in the 21st Century

KUALA LUMPUR, 2 August 2023 – The Prime Minister recently launched the Madani Economy framework, which sets out a goal of placing the country in the top 25 nations in the world in the Corruption Perception Index. Whistleblowing is proven to be an effective method to help combat fraud and other misconduct, especially within organisations.

In conjunction with World Whistleblower’s Day this year, Deloitte unveiled its highly anticipated 2023 Asia Pacific Conduct Watch Survey Report. The report not only showcases findings on organisational capabilities, but also their attitudes towards whistleblowing, painting a vivid picture of the current state
of affairs in the region.

In Malaysia, more than half of the survey respondents indicated that whistleblowing is a high priority in their organisations, with improving organisational culture, detecting fraud and other misconduct, and encouraging positive and transparent working environments cited as the top three purposes of whistleblowing programs in their organisations. This sentiment was similarly echoed across Asia Pacific. Close to 70% of Malaysian respondents also indicated that their Board of Directors and board committees have overall responsibility for the whistleblowing program in their organisations, as compared to our neighbours (Only 44% of respondents across Asia Pacific indicated that responsibility lies with their Board of Directors and board committees). It is encouraging to note that board members and senior management in Malaysia feel that as guardians and stewards of their organisations, the onus is on them to spearhead efforts on this front, driving towards desired change.

This is especially so with S17A of the MACC Act, which created personal liabilities for directors if organisations are found guilty of corruption. Almost all of our survey respondents (96%) stated that their organisations have a whistleblowing policy, with a majority indicating that these policies include important provisions governing confidentiality, anonymity, protection against retaliation, reporting channels and processes for disclosures received.

Despite the wide usage of technology in many business processes, the survey highlighted that the availability of a web-based platform to submit whistleblowing disclosures was still limited, with many opting for email instead which is comparatively sub-optimal.

It is also worth noting that the availability of reporting channels made to external parties is relatively low, although in this regard, Malaysia fared better than her neighbours. Only 7% of organisations in Malaysia do not have reporting channels for their external parties, in comparison to 25% of respondents across Asia Pacific.

At the end of the day, the cornerstone of a whistleblowing program rests on the trust in the program from the very people it was set up to help – everyone within and outside the organisation. How disclosures are managed and communicated to whistleblowers on progress and decisions taken indirectly shows them if their concerns have been taken seriously. In this regard, Malaysia still has room to improve. The top three challenges faced by organisations across the region and Malaysia is related to employees' mindsets and awareness, with 80% of Malaysian respondents citing that their challenge remains concerns by employees over independence of the reporting process.

A significant proportion of organisations in Malaysia (29%) did not measure the effectiveness of their whistleblowing program. Out of those which did, 32% relied solely on the number of reports received to measure effectiveness. It is important to shift to a more holistic view, to understand overall levels of awareness and trust in the program, and the willingness of individuals to come forward. The importance of robust whistleblowing programs and the role of whistleblowers can no longer be ignored as organisations continue to navigate the labyrinth of today’s business landscape.

Oo Yang Ping is the Conduct Watch Leader for Deloitte Asia Pacific and Forensic Leader of Deloitte Malaysia. The above views are his own.

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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