The need for a whistleblowing policy

We have seen recently World Vision Australia reported on ABC news, with a staffer suspended pending investigation into an alleged conflict of interest, with the Sydney Morning Herald (SMH) saying that World Vision brushed off reports of corruption.

silver whistle

The articles describe allegations wherein the father of a senior employee was engaged to advise on the procurement of printing contracts for the organisation, and that he collected commissions from the printing company that were never disclosed to World Vision Australia.

The SMH article describes that a whistleblower made enquiries to meet with the CEO, but that the CEO’s office alerted the employee who was the subject of the allegation and did not investigate the matter appropriately.

Sadly, it is not just the corporate sector where organisations can fail to live up to their values, and the not for profit sector is not immune to this type of conduct.

The World Vision example demonstrates the potential negative impact that media attention resulting from an external party can have on a not for profit organisation’s brand.

Trust is such an important asset for a not for profit organisation to have with its community and stakeholders, and examples like this can undermine the trust and confidence people have in an organisation and brand. In fact, trust is actually the currency that the not for profit sector relies on – it underpins voluntary donations, volunteering and government tax treatments. Damage to the trust of a big brand in the sector actually risks undermining trust in the sector as a whole.

The World Vision case also demonstrates the importance of having a robust whistleblowing policy, which not only defines the process for someone to raise a concern, but also includes a robust approach to investigating such concerns.

Many not for profit organisations were caught up in recent legislative changes requiring a whistleblowing policy to be in place for public companies and large private companies. Charities that are companies registered with ASIC must comply with the legislation which came in to place in July 2019. Further information is available online from the ACNC.

This case also brings in to question the decision-making structures around procurement decisions, and is a timely reminder to review levels of delegated authority, along with who has the ability to influence or approve certain procurement contracts.

A major focus of the role of a leader is in building a positive aligned workplace culture. Boards, CEOs and management teams all need to do their part to ensure that the culture aligns to the values of the organisation, such that inappropriate behaviour is never tolerated. There are important practical steps that leaders can take in building the culture that your employees and clients deserve which we wrote about in the article Is your workplace toxic?

Some steps that not for profit providers can take to prepare now and mitigate the risks identified through the World Vision case are:

  1. Review the requirements (and take legal advice if necessary) regarding having a whistleblowing policy.
  2. Ensure that delegated authority levels are clear, documented and recently reviewed.
  3. Look at what further actions can be taken to positively shape the workplace culture.

References:

  1. ACNC Factsheet – https://www.acnc.gov.au/tools/factsheets/whistleblower-protections
  2. https://hallandwilcox.com.au/thinking/new-whistleblower-laws-apply-from-1-july-2019-3-things-employers-should-do/
  3. https://www.bdo.com.au/en-au/accounting-news/accounting-news-july-2019/whistleblowing
  4. https://www.nortonrosefulbright.com/en/knowledge/publications/63b0f230/update-on-new-whistleblower-protection-laws-in-australia

CBB consultants have experience in helping organisations plan their risk management activities. If you’d like assistance with risk management, please contact Andrew for an initial obligation free consultation with one of our consultants.

 

Andrew Ellis
Business Consultant
Email: aellis@cbb.com.au
Phone: 1300 763 505