Why Confidentiality is Key in Whistleblowing

Authored by Mini vandePol (Partner, Hong Kong) and Georgie Farrant (Partner, Sydney).

Confidentiality is one of the significant challenges for whistleblowing particularly under the Australian regime.

Why is confidentiality key?

For a whistleblower program to be effective, employees and other potential reporters must trust and use the system. A key part of gaining such trust is preserving the confidentiality of the whistleblower. If a whistleblower is thinking about sticking their neck out and telling the company something that they think is going wrong, they need to be confident that their identity will not be revealed to those who may be involved in the wrongdoing, or who might have a say in their professional future.

?Whilst the first person to receive the complaint often has the responsibility not to pass on identifying information in order to protect confidentiality of the whistleblower, that person will usually not be the person tasked with undertaking an investigation of the report.?In addition, other people, such as members of the board or risk committees, may have an interest in understanding that allegations of wrongdoing have been made, but may not be entitled to be told the identity of the whistleblower. Therefore, the first person to receive the report needs to determine how to communicate necessary information whilst ensuring that confidentiality requirements, either under their own policies or under legislation, are not breached.

The simplest solution is to obtain the consent of the whistleblower to pass on all necessary information, including their identity, to relevant people, and 70% of respondents indicated they adopted this approach.?Companies should think about including consent language in their reporting systems, and/or training those who might receive reports about the importance of obtaining consent to the passing on of information. It is important to consider the distinction between conveying the substance of the report verses disclosing identifying information of the?whistleblower.?

?As part of our research for our recent report, Asia Pacific Whistleblowing Landscape: Benchmarks and Best Practices ,?we asked respondents whether anyone in the organization had breached the confidentiality provisions in their own whistleblowing policies, whether inadvertently or otherwise over the last three years. We asked this because our experience is that it can be easy for companies to inadvertently breach the confidentiality requirements and that has been particularly prevalent following the introduction of the new Australian legislation.??

?Some employees think that if they make a report, all details will be communicated directly ?to HR including the identity of the whistleblower.?However under Australian legislation, and many companies' own policies, this not permitted unless you have the express consent of the whistleblower. There needs to be a chain of confidentiality in handling the complaint.

?Disparity across the region

In Australia, only three per cent of the respondents said "Yes, they thought there had been a breach of the confidentiality provisions." Whereas in Mainland China, that figure rises to sixty-seven percent who thought there had been a breach of the confidentiality provisions in the last three years.

?The survey results also show that a wide range of measures are being utilised to protect confidentiality.?In addition to the use of consent language:

So what can companies do? A few key points below:?

• ?Invest in robust whistleblowing procedures that encourage individuals to report issues, while at the same time protecting the company and the individuals making the report.
• Raise awareness of the whistleblowing program/procedure, and ensure training is offered to all employees during induction.
• Train officers and executives to identify protected disclosures, comply with anonymity obligations and ensure that the disclosure is reviewed properly.

We welcome you to read more in our report .