Best Practices For An Effective Whistleblower/Internal Reporting Program In The US

Originally published by Caroline B. Burnett and Meredith L. Kaufman.

The value of robust internal reporting procedures was underscored this week when the SEC publicized it’s largest-ever whistleblower awards. On March 19, the SEC issued a press release announcing that three individuals will get more than $83 million for providing information to the agency to help bring a case.

 

With the cost of inadequate reporting policies and procedures hitting an all-time high, here are several best practices to consider when reviewing your company’s whistleblower or internal reporting program:

• Ensure your Code of Conduct is published, widely disseminated and the subject of regular training. (For help “globalizing” your Code for use outside the US and addressing commensurate data privacy compliance, reach out to your Baker McKenzie lawyer.)
• Provide an anonymous way for employees to share feedback internally. Implement a tracking system for assessment and case management. (Note: best practices shift when implementing reporting systems for a global or cross-border workforce. This post assumes a US employee population only.)
• Policies should require employee cooperation, allow for prompt zero-tolerance remedial measures and offer to protect confidentiality to the extent possible.
• Communicate to and train all employees at every level in the organization on the program. Engaging your employee population is key to an effective training program. Meaning, mix it up a bit—use interactive exercises, provide context and use real-world examples.
• Ensure that employees are protected against retaliation by training managers, periodically checking in with employees who have raised concerns and investigating any whiff of retaliatory conduct. Fear of reprisal is the main reason employees don’t escalate compliance-related concerns. Employees who trust the complaint resolution process are more likely to raise concerns so that the company has an early warning of any potential systemic issues.
• Follow-up with employees who raise concerns. To the extent possible and where appropriate, keep employees informed of the status of the investigations, conclusions, disciplinary actions, etc. This helps bolster employee belief in organizational justice.
• Establish monitoring and auditing procedures to continually assess the program’s performance.
• Create a culture of trust in which voluntary, good faith reports are encouraged. The importance of the “tone at the top” cannot be overstated. Highlight examples of positive employee behavior to reinforce conduct that is consistent with company culture.

Contact your Baker McKenzie lawyer for assistance in strengthening your US compliance policies and procedures, or for help taking your compliance program global.

Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.

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