How Creating a Whistleblowing Policy Can Protect Your Business

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As business owners, we hope to never have need of a whistleblowing policy. But that doesn’t mean it isn’t incredibly important for protecting ourselves, our businesses and our employees.

Whistleblowing policies are put in place to ensure employees they are protected if they feel there is a topic or problem that needs to be discussed. It also helps you as a company identify what complaints actually constitute whistleblowing and to put guidelines or consequences in place if false allegations are made against the company.

If you don’t have a whistleblowing policy for your company, here are a few of the main reasons why you need to consider creating one, and what you should have in mind while creating your policy.

What Is Whistleblowing?

Whistleblowing happens when an employee — the whistleblower, or “relator” (the technical term used for a whistleblower) — brings a concern, misconduct or questionable act within the company to the public’s attention. When a whistleblower decides to speak out about a certain instance of misconduct within the company, they are doing so because they believe it should be public knowledge.

There are many different reasons why a whistleblower may feel compelled to address a legitimate issue with the company. From illegal behavior within the business to environmental damage, employees may decide the best way to solve a problem is to get the public involved.

While the best way to avoid having whistleblowers within the company is to always conduct business in an ethically sound manner, many employees may fear what will happen if they bring misconduct to the public. This is where a whistleblowing policy can help.

Why Have a Whistleblowing Policy?

When your company has a clear whistleblowing policy in place, everyone is protected. Employees have set guidelines to follow concerning how they should approach the topic and what needs to be done if they feel misconduct is going on.

A whistleblowing policy also helps employees recognize what is considered whistleblowing and what is not. There are only certain disclosures that are protected, including criminal offense, not following legal obligations or a breach of safety.

A gray area appears in whistleblowing when employees become angry or feel as if their feelings have been ignored. “A strong compliance department should, of course, help put a stop to unethical or illegal activities. But it can also play a critical role in reducing a company’s exposure to a lawsuit from a dissatisfied employee,” says Matthew K. Organ, Principal, Goldberg Kohn.

Whether they feel like they were fired inappropriately or they are otherwise angry with the company, they may take their feelings and emotions out by speaking poorly about the business leaders under the guise of whistleblowing.

A whistleblowing policy can also protect your business if an employee or ex-employee tries to make false accusations about the business. Within your whistleblowing policy, you can outline consequences for making false claims about the company.

What to Include in Your Whistleblowing Policy

When creating your whistleblowing policy, there are a few things you will want to consider. One of the most important parts is understanding who is considered an employee and who is not. Because your whistleblowing policy is only meant to protect your employees, you will want to establish exactly who that includes.

You will next want to create a direct path for employees to use if they have issues they would like to discuss. Make it clear who they should talk to first, and provide that department or individual with the proper training to ensure each issue is properly addressed.

You will also want to create an outline for the way other employees should act when there’s a whistleblower within the business. Everyone from upper-level management to trainees or interns will need to know the proper procedures to follow during a whistleblowing case.

Finally, be sure to include consequences for reporting a false claim. While you are able to select your own consequences, most companies choose termination of employment or a demotion. Be sure that you clearly lay out what may happen if an employee decides to make unethical or false claims about the company.

After creating your whistleblowing policy, ensure everyone is properly informed and trained. Redraft your contracts with your employees to include a whistleblowing section. If anyone has any questions, be sure to answer them honestly and completely.

While we all hope to never need to use our whistleblowing policy, they are beneficial to have in place. When you have a clear policy for employees to follow when they have an issue they would like to discuss, you can get to the bottom of the problem before you ruin your company and your reputation.

To further avoid the need to use your whistleblowing policy, pay close attention to the actions and behaviors of your employees. Resolve issues quickly and appropriately, but always be open with your employees. Should something arise, having a strong whistleblowing policy in place can help protect both you and your employees.