A reconstruction of events and an outlook on how to avoid them.
Avoiding unethical practices: Why all companies need an independent whistleblowing channel
The fight against unethical practices and the protection of honest employees should always be in the interest of companies. Minimizing risk is crucial to maintaining investors’ confidence and the integrity of financial markets. Once lost, the confidence of investors and employees is hard to rebuild.
For this reason, companies need to have a system that enables employees to report irregularities. Many employees fear retaliation when reporting abuse within their company. To help alleviate this fear it is advisable to implement a confidential whistleblowing system that provides whistleblowers with adequate protection (total anonymity if required). Only by having effective internal systems for reporting misconduct can companies identify risk at an early stage and take action.
It is a false economy for a company not to provide a confidential whistleblowing system to their employees. The decision might save money at the beginning, however, over the longer term, losses related to financial, reputational and other damage can be significant when issues are not identified.