Has your company implemented a compliant whistleblower policy?
Whistleblowing is an important part of the current corporate landscape. It promotes a variety of key values, such as a company’s compliance to laws which are key to keeping both companies and individuals accountable for their actions. The Corporations Act 2001 has given whistleblowers certain protection with the aim to encourage them to come forward with their concerns.
As of 1 of July 2019, the Corporations Act was altered/expanded, with the aim to increase protection for whistleblowers who are considering reporting any form of misconduct within their workplace. This change includes the requirement of public companies, large proprietary companies and corporate trustees of APRA-regulated superannuation entities to have a documented whistleblower policy from 1 January 2020.
The two main changes to support whistleblowers are:
- A wider range of people are now protected such as former employees and family members of present and former employees.
- Individuals can now anonymously disclose information.
Possibly the largest impact of the change in the Act is the enforcement of public companies, large proprietary companies and APRA-regulated superannuation entities to have a documented whistleblower policy as of 1 January 2020. If any of these entities fail to have a policy in place by this date, penalties up to $12,600 could be handed down. This whistleblower policy must include a wide range of aspects including information about the way whistleblowers would be legally protected as well as how the company will follow up any disclosures and protect the whistleblower after disclosing information. A thoroughly thought out and well communicated whistleblower policy is important on many levels. Company officers as well as auditors and senior employees have different obligations under the Corporations Act when they receive information from a whistleblower and if not followed correctly could result in a breach of the Act. In addition, a good whistleblower policy will assist in deterring future misconduct will encourage more disclosures and will improve the culture of whistleblowing.
In order to help companies develop this policy and comply with legal obligations, ASIC has released Regulatory Guide 270 Whistleblower Policies, which also contains direction on how to properly maintain and implement a whistleblower policy. RG 270 may also assist those companies not required under the Act to have a whistleblower policy, but may see such a policy as being in line with improving their governance and compliance measures.
Under the new changes in the Corporations Act, companies are required to implement a policy covering information such as:
- What protections are afforded to whistleblowers?
- How the company will protect and support whistleblowers from detriment?
- How the company will investigate disclosures?
- How the company will guarantee fair treatment of employees who are either mentioned in the disclosures or who are the subject of disclosures?
- How the whistleblower policy will be made available to employees of the company?
A whistleblower policy is becoming more and more relevant in today’s landscape, and now for certain companies is a legal requirement and should be carefully and thoughtfully implemented and conveyed to all employees.
It is important for organisations to assess their risk environment on a regular basis for the business to have the ability to grow and remain competitive in a constantly changing environment. A risk and governance review will provide an independent assessment of an organisation’s risk and governance functions. Contact our Audit Specialists for more information on (03) 9835 8200.
