Earlier this month, the Australian Securities and Investments Commission (ASIC) released a report outlining the dos and don’ts for handling whistleblower investigations.
Since the new whistleblower regime commenced in 2019, ASIC has issued extensive guidance on the requirements for a compliant whistleblower policy (see our earlier articles on ASIC Regulatory Guide 270 and its whistleblower policy review). However, regulated entities have so far received little guidance on how they should handle a whistleblower disclosure or the subsequent investigations.
The penalties applicable to mismanagement of a whistleblower investigation are significant – for example, disclosure of a whistleblower’s identity without their consent can attract a criminal penalty of six months imprisonment or, for a company, a civil penalty equivalent to the greater of:
Given the stakes, we expect ASIC’s new guidance to be welcome news for directors and officers of regulated entities.
So, what are ASIC’s tips? We set out four key recommendations below.
It’s important to ensure that your organisation takes a consistent approach when responding to whistleblower complaints.
This is helpful from an organisational perspective and helps avoid allegations that one whistleblower complaint is being treated unfairly or less seriously compared to others.
By thinking ahead and formalising key procedures for responding to whistleblower reports, organisations can ensure their practices outlast any one key employee. ASIC warns against the risk of relying “solely on the skill and experience of one or two individuals involved in the processes.”
An organisation’s directors, officers and senior managers are, by law, “eligible recipients” of a whistleblower disclosure. This means that a disclosure about reportable conduct made by an eligible whistleblower to any of those persons will qualify for protection under the whistleblower regime.
Organisations should train their eligible recipients to know:
This could be achieved by:
ASIC has long emphasised the importance of creating a culture in which employees and other eligible whistleblowers are encouraged to speak up about their concerns.
In ASIC’s new guidance, they also suggest some mechanisms for measuring the success of your whistleblower program. For example:
ASIC encourages organisations to use whistleblower reports as an opportunity to improve. You can do this by:
If your organisation has had a number of complaints, it might be worth considering how you are learning from the whistleblower reports. If you have not yet had this experience, then training your eligible recipients might be a good starting point. Research has shown that successfully triaging a complaint consistently generates better outcomes for all parties, giving you a more timely and cost-efficient process.
If you have any questions about ASIC’s new guidance or are seeking assistance with reviewing your whistleblower process, please get in touch with a member of our team below.
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.