Fredrick D. Lipman provides several insights to Conference Board readers drawn from his recent book Whistleblowers: Incentives, Disincentives, and Protection Strategies (Wiley Corporate F&A).
Lippman finds seven major problems with most current whistleblowers systems:
- The tone at the top tolerates but does not encourage whistleblowers, particularly executive whistleblowers.
- There is no meaningful reward or recognition for legitimate whistleblowers.
- The inability to communicate with anonymous whistleblowers result in a failure to fully investigate anonymous information.
- The system does not guarantee anonymity.
- This system is not well advertised.
- The audit committee uses employee administrators and investigators who are not viewed as independent by whistleblowers and do not have forensic skills.
- Whistleblowers motivations and personalities affect the investigation
Lippman goes on to provide a number of very important recommendations, primarily aimed at increasing the independence of whistleblower systems. It’s an important article for audit committees as they re-examine whistleblower and compliance policies.
From Enron to Lehman Brothers: Lessons for Boards from Recent Corporate Governance Failures should be helpful to many. Also worthy of considerations — programs from the Business Integrity Alliance as well as the possibility of establishing an organizational ombudsman program.