Webinar: Corporate Compliance in the Whistleblowing Era

Australia’s corporate whistleblowing regime is set to ramp up from January 2020 with a new focus on supervision and enforcement, a Thomson Reuters webinar has heard. A live poll of more than 200 risk and compliance practitioners found that only three quarters were certain their organisation would be ready for the requirement to have a Whistleblower Policy in place within the next six weeks.

The Australian Securities and Investments Commission (ASIC), which oversees the regime, will be starting its targeted supervision work from the beginning of next year, officials said.

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Howard Whitton, co-founder at the Ethicos Group, said the reforms would involve a fundamental change in mindset at Australian companies. He said organisations needed to view whistleblowers as a valuable source of corporate intelligence. A live poll of compliance practitioners and lawyers found that only 36% of organisations viewed whistleblowers as an asset.

“The proper purpose of whistleblowing protection law is not protecting whistleblowers. It’s actually encouraging people who know something about misconduct to come forward and disclose it”

– Howard Whitton, Founding Director, The Ethicos Group; Visiting Fellow (Governance) University of Canberra; Research Associate (Corruption) ANU

Organisations need to have a clear understanding of the disclosures that are covered by the new laws, as well as those that are excluded and should be sent to other agencies, such as personal grievances and workplace matters.

The webinar heard that ASIC would be running supervision to ensure that organisations have embedded the key changes in their policies, systems and controls.

The “fundamental shift” in the new legislation

Sally McDow, partner at CPR Partners and a former whistleblower, said one of the most significant changes is the wider range of misconduct that is covered under the legislation, including an “improper state of affairs” in a company.

“The previous protections were very narrow and only focused on breaches of the Corporations Act, which not a lot of people necessarily understood or could identify. It’s now been opened up to improper states of affairs and misconduct covering a large range of issues, including breaches of all legislation and other inappropriate conduct,” said Sally.

“Another big change is that the protections being offered are open to a much wider range of people now. Previously it was just for employees. Now that’s opened up to former employees as well as contractors and those who provide services to an organisation, as well as spouses and relatives of those people. So it’s a much larger bucket of people that can provide a report,” she said.

In view of this broad array of stakeholders, it is crucial that organisations make their policies clear, accessible and not overly legalistic, the webinar heard.

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Sally said the mandatory Whistleblower Policy with specified content was a fundamental shift in the new legislation. The deadline for companies to have a policy in place is January 1, 2020.

The webinar heard that the range of disclosures that are protected have expanded to include:

  • Matters in relation to conduct of the company, including breaches of legislation
  • Unlawful conduct in financial and credit matters
  • Breaches of Corporations and ASIC legislation
  • Breaches of Commonwealth legislation punishable by imprisonment of 12 months or more
  • Danger to the financial system or the public
  • Improper state of company affairs
  • General misconduct

The obligation to protect whistleblowers from experiencing detriment is also an onerous obligation under the new laws. Breaches in this area could expose companies to the risk of significant damages in the form of reputational harm, financial penalties and compensation.

“We’re seeing a lot of challenges around how to manage reprisal risk, in terms of how the policy deals with whistleblowers being protected and reporting on issues that they’re experiencing as a whistleblower and the protections that the organisation will offer those people. Certain organisations are using the whistleblower protection officer model, some organisations are using other models,” Sally said.

“We would recommend against having someone very senior in the organisation to hold that role because they’re likely going to be too busy to provide the necessary on-the-ground support. So having the CEO or the CFO as the whistleblower protection officer isn’t what we think is necessarily going to be practical…these whistleblowers will need to be able to call someone on the phone when they need support”

– Sally McDow, Partner at CPR Partners, Senior Consultant at Your Call Whistleblowing Solutions and Non Executive Director 

The webinar also heard that organisations need to review ASIC’s latest guidance to ensure they have an appropriate audit framework in place. ASIC released RG270 on whistleblower policies on the 13th of November.

Access Corporate Compliance in the Whistleblowing Era, the complimentary Thomson Reuters webinar, to enjoy to the full presentation.

Nathan Lynch is the Manager for Thomson Reuters Regulatory Intelligence in Asia Pacific. Nathan has reported on regulatory affairs, anti-money laundering and compliance developments across the Asia Pacific region. Since graduating from Australia’s Curtin University with an honours degree in journalism in 1998, he has written for a number of leading publications, including the Sydney Morning Herald and The West Australian, and has appeared on Sky Business and on ABC as a specialist commentator on financial markets, anti-money laundering and regulation.

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