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

Bonifacio Global City, Taguig, 3 July 2023 – On the heels of World Whistleblowers’ Day, which was observed globally last June 23, Deloitte released its inaugural Asia Pacific Conduct Watch Survey report – a regional look into the prevailing organizational attitudes and capabilities surrounding whistleblowing.

The survey, conducted between 31 March 2023 and 1 May 2023, received responses from over 500 organizations throughout the Asia Pacific region, including Japan, Korea, China, and – from Southeast Asia – the Philippines, Thailand, and Vietnam. Survey respondents spanned over 10 different industries and ranged from organizations 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 affected the purpose and use of whistleblowing. Some 70 percent of respondents see whistleblowing as a means to improve an organization’s culture of ethics and integrity; 66 percent see it as a way to detect fraud and other misconduct; and close to 60 percent 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. Asked what trends they have observed in the types of disclosures reported over the last two years, 48 percent of respondents noted human resource grievances, while 25 percent cited sexual harassment. Indeed, during Deloitte Philippines’ in-person event to launch the report, one attendee shared how their whistleblowing mechanism was used to report inappropriate behavior on the part of a senior executive.

This emphasizes the evolving role that whistleblowing plays in addressing broader issues in the workplace.

Aligning priorities between an organization and its stakeholders and fostering accountability is crucial for successful whistleblowing programs.

While 58 percent of respondents indicated that whistleblowing was a high priority within their organization, 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.

“This disconnect between what people say – that whistleblowing is a priority – and what people do – not giving the board oversight for whistleblowing – is one of the roadblocks to optimizing a whistleblowing program,” said Neal Ysart, Deloitte Philippines’ Forensic Leader, during the firm’s in-person event to launch the report. “If employees and third parties do not see actual leadership support for this policy, it is less likely they will step forward and speak up, if and when they have knowledge of wrongdoing,” he adds.

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 organization’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 percent lack awareness of whistleblowing programs; and 42 percent fear retaliation against them.

This was evident during Deloitte Philippines’ in-person event, which gathered business leaders from diverse sectors such as financial services, the academe, BPO, information and communications technology, and renewable energy, with mandates related to internal audit, legal, governance, and HR. One of the key concerns voiced by the attendees is how to engender support among staff members for their whistleblowing programs.

“Some attendees raised issues around communicating the existence of their whistleblowing program without branding it as ‘whistleblowing’ because of the possible negative connotation of that term. Others asked about the soundness of offering incentives to encourage employees to use the whistleblowing tool, while others – and I believe this is a concern shared by most, if not all, of our attendees that day – asked about balancing the need to protect whistleblowers with the need to thoroughly investigate an allegation,” said Ysart. “These are all good problems to have because it points to an organization that is working at improving transparency and accountability, but it also points to the work that still needs to be done around inspiring trust and confidence in whistleblowing programs.”

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.

Organizations 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 percent of them highly prioritize whistleblowing. Among the 70 percent that evaluated the effectiveness of their programs, 30 percent 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.

“Leaders, for example, should look at the three drivers behind whistleblowers speaking up: (1) the desire to do the right thing, (2) the need to even the score with someone, and the mistaken notion that weaponizing the whistleblowing tool could achieve that, and (3) the instinct to protect oneself if complicit in the wrongdoing. Understanding these drivers and which ones are fueling the use of your whistleblowing mechanism is also an important part of measuring effectiveness,” said Ysart.

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, organizations throughout the region are recognizing the importance of establishing strong whistleblowing programs.

“Whistleblowing remains one of the most effective countermeasures against fraud and misconduct. In a post-pandemic workplace where boundaries are more fluid and workers and entire organizations are collaborating with outside parties on deeper levels, it is even more important for leaders to enlist as many stakeholders as possible in maintaining the integrity of their organizations. A robust whistleblowing policy can do that, and it is up to leaders to regularly revisit that policy to make sure it is fit for purpose in ensuring good corporate governance,” said Ysart.