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Eukleia and Waypoint GRC 'Speaking up about whistleblowing' webinar slides
- 1. Liz Hornby, Principal Consultant, Eukleia Paula Davis, Director, Waypoint GRC Michael Gleave, Global Compliance Officer, Lundbeck Speaking Up About Whistleblowing How to get the most out of your whistleblowing system
- 2. Your panellists Paula Davis, Director, Waypoint GRC Michael Gleave, Global Compliance Officer, Lundbeck Liz Hornby, Principal Consultant, Eukleia
- 3. What we’ll cover today • What do we mean by whistleblowing? • Challenges for an effective whistleblowing system • Overcoming the challenges – building a speak up culture in practice • Q&A
- 4. What do we mean by Whistleblowing? Liz Hornby, Principal Consultant, Eukleia
- 5. What do we mean by whistleblowing?
- 6. A policy needs a definition “The practice of informing on someone or putting a stop to something.” Collins English Dictionary
- 7. What does your policy say? You are concerned that colleague is not following an internal policy. You decide to speak to your line manager about your concerns.
- 8. Polling question What did you just do? A. Act like a responsible employee B. Escalate an issue C. Make a report D. Blow the whistle
- 9. Definitional factors • Type of wrong doing • Materiality • Organisational involvement • Public interest • Legal/Regulatory • To whom? • Duty/obligation
- 10. Polling question What type of duty? A. Legal/Regulatory B. Contractual C. Ethical/Moral D. It is not a duty
- 11. Institutionalisation • Growing trend – led by financial services, policing, education, healthcare • Means where an organisation permits, and sometimes requires a whistleblower to use, or at least consider using, internal disclosure channels provided by the organisation before turning to external disclosure channels • A policy needs a definition • Danger of responsibilisation See Vandekerckhove and Commers (2004.p.226)
- 13. • Most whistleblowers see their act as a moral act – a “choiceless choice” • Most whistleblowers raise a concern multiple times before going outside their organisation • Most whistleblowers see themselves as responsible employees, rather than whistleblowers, at least until they go outside their organisation • Many whistleblowers suffer retaliation in practice - many never work again, suffer financial hardship and damage to their health
- 14. How?
- 15. The act? Line manager Senior Management Whistleblowing Champion/Nominated Person such as a NED Regulator/ Lawyer/ Media Internal Hierarchy External Dedicated Hotline etc. Independent /Quasi External
- 16. Key challenges that organisations face in implementing a genuinely effective whistleblowing solution. Paula Davis, Director, Waypoint GRC
- 17. The Challenges
- 19. Polling question What channels for reporting misconduct exist in your organisation? 1. Telephone and e-mail reporting to an internal team only 2. External service including telephone and web-based reporting 3. External service including telephone, web reporting and mobile app
- 20. The internal ‘hotline’ Shows commitment to listening to employees’ concerns IF there is someone at the end of the line Concerns about confidentiality and impartiality can hinder reporting Systematic case management
- 21. The external call centre Confidence imparted by an impartial third party Typically includes case management tools Degree of multilingual support available BUT…
- 24. Deploy multiple reporting channels Effective language support for ease of reporting Think mobile Think apps Things to consider
- 26. Fear of retaliation Belief confidentiality won’t be respected Management involved in the hotline Cultural barriers
- 27. Fear of retaliation Belief confidentiality won’t be respected Management involved in the hotline Cultural barriers
- 29. No good deed goes unpunished Fraud Magazine: “Be prepared before you blow the whistle”; Patricia A. Patrick, Ph.D., CFE, CPA, CGFM
- 30. No good deed goes unpunished Rates of retaliation have doubled since 2013 Rates of retaliation have risen significantly more than rates of reporting ECI Global Business Ethics Survey 2018
- 32. Implementing an effective whistleblower system: Lundbeck’s journey Michael Gleave, Senior Compliance Officer
- 33. ABOUT LUNDBECK We strive for global leadership in psychiatry and neurology by improving the lives of patients Vision Principles We are focused, passionate and responsible For more than 70 years, we have been at the forefront of neuroscience research and our development of pioneering treatments makes a difference to patients worldwide. Key disease areas Depression Schizophrenia Alzheimer’s disease Parkinson’s disease
- 34. External factors driving Lundbeck’s hotline setup • Stringent regulations governing pharmaceutical industry • Qui tam exposure • Interactions with healthcare professionals and patients • Value chain complexity involving multiple third parties
- 35. Establishment objectives • Increase reporting via a secure channel • Ensure internal and external reporting • Embed a speak up culture • Create a systematic global investigations process Lundbeck’s Compliance Hotline
- 36. Lundbeck’s Compliance Hotline setup 0 10 20 30 40 50 2014 2015 2016 2017 2018 Report totals Reports • Established in 2014 • Administered by two employees in Corporate Compliance • A global team of ”case experts” established for investigations • Governed by a global investigation procedure • Oversight in Lundbeck’s Audit Committee
- 37. Effective implementation: Lundbeck’s journey Hotline system prerequisites • Latest technology enabling web and app. reporting • Languages need to reflect Lundbeck’s global footprint • End to end secure case management • Data analytics and reporting capability • Simplified data privacy management
- 38. Investigation integrity • Robust non retaliation policy which is enforced • Rapid response to Reporters when reporting (<24 hours) • Communicating consequences of misconduct • Protecting the reputation of the Accused • Disclosing hotline statistics in annual report Effective implementation: Lundbeck’s journey
- 39. Ongoing awareness is key. Our channels include • CEO town hall • Global management meetings • Regular Code of Conduct training • Local sales meetings • Induction and refresher face to face training • Intranet/Internet landing pages • Coffee machine updates Effective implementation: Lundbeck’s journey
- 40. Global investigation complexity • Complex local regulations governing investigations • National privacy requirements • Restrictive labour laws • Regulatory self reporting
- 41. Lundbeck’s investigation strategy: 2018-2020 Enhanced case management and hotline system • Leveraging regional compliance officers for investigations and ongoing awareness • Deployment of data analytics in compliance monitoring activities • Application of robotics
- 42. We hope you enjoyed the webinar. We’d now like to open the floor for any audience questions. Please submit them in the Questions tab on your navigation panel.
- 43. Calls To Action: If you would like to contact us after this event with any follow up questions, please find our email addresses below. liz.hornby@eukleia.com migl@lundbeck.com paula.davis@waypointgrc.com
Editor's Notes
- Hello and welcome to today’s webinar hosted by Eukleia and Waypoint GRC looking at how to get the most out of your whistleblowing system. Before we get started, I’d just like to review a few housekeeping items: - All phone lines are on mute to avoid interruptions during the broadcast. - To download the slides for today’s presentation, you can expand the HANDOUTS panel located to the right of your screen and click on the PDF icon. - During the session, there will a couple of polling questions. Please note that your individual responses will not be shared with the audience. However we will share the aggregated results so you can see how you are positioned among your peers. - At the conclusion of today’s presentation, we will have a Q&A session. However, I would encourage you to submit your questions and comments at any time using the QUESTIONS panel located to the right of your screen. We will email a playback link to all Attendees on today’s call within the next few days.
- I’m Paula Davis, co-founder and director of Waypoint GRC. I’m delighted to be joined today by Liz Hornby from Eukleia and Mike Gleave from Lundbeck. Liz Hornby, Principal Consultant (LLB, Barrister, M.Phil, M.Res) Liz is a qualified barrister with an M.Phil degree in Criminology from the University of Cambridge. She started her career at the London Stock Exchange before moving into Compliance policy roles in the late 1980s at two international investment banks, Nomura and Goldman Sachs. She then worked as a compliance consultant for 15 years before joining Eukleia 9 years ago. Liz has recently completed a Research Masters in Corporate Governance and Business Ethics at the University of London. Her thesis was on the use of Codes of Conduct in the UK financial services industry. She is continuing her studies to PhD level and is currently undertaking a discourse analysis of institutionalised whistleblowing in the UK banking industry. Liz is Eukleia’s Principal Consultant and a Governance, Risk and Compliance specialist. In this role, she specialises in authoring and delivering digital and face to face training on conduct, ethics, management and corporate governance. Mike… [please provide short bio]
- Notes
- Notes Let’s start with some of the policy challenges for organisations
- Notes It is no one definition of whistleblowing (often called “raising concerns” or “speaking up” in policies. The disputed origin of the term is shown in the images on the slide. It is for each organisation to define it for themselves in their policy and procedures. The definition that you use will be shaped to some extent by the regulatory and legal environment within which you operate as well as your internal Values/Code of Conduct (ie regulated and non-regulated sectors). Remember that legal protections for employees may only apply where the disclosure falls under a legal or regulatory definition. This can create a confusing picture. It is important to be clear to your employees what falls within and without your policy.
- Notes A simple scenario but tests the definition of whistleblowing
- Notes
- Notes What were the factors that shaped your decision? Would that be clear from your policy? How would this be treated under your policy? In a regulated environment, an employee may be under a duty raise a concern. Do you make it a contractual obligation under your policy?
- Notes Focusing on the last factor on that list. What type of duty is whistleblowing?
- Notes This is a growing trend in a number of sectors in the UK including policing, education and health care. Responsibilisation means that employees can be punished for not blowing the whistle.
- Notes Let’s start by grappling with what we mean by whistleblowing.
- Notes Some would argue that whistleblowing has to be a moral or ethical choice. Perhaps something that an organisation does not what to hear. That makes it particularly hard to capture in a policy.
- Notes Let’s turn to the process
- Notes Most organisations have a hierarchy similar to this. If you speak up once, is that enough. Role of the dedicated hotline? We will now look at the challenges
- Notes
- Most organisations today have some sort of whistleblowing or hotline system in place often in response to a legal or regulatory obligation. However these solutions are often have low rates of reporting despite often quite high rates of observed misconduct. I’d argue that if there is something of concern going on in your business, then you want to be the first to hear about it – certainly before the media or the regulator, so an effective whistleblowing solution is key to managing and mitigating compliance risk. So I’m going to spend a few minutes looking at the key challenges that organisations face in implementing a genuinely effective whistleblowing solution.
- There are two sets of challenges relating to driving adoption of whistleblowing solutions. On is the systems and infrastructure for whistleblowing that companies adopt. The other is the organisational ethical culture which can have a huge impact on the use (or lack of use) of reporting channels.
- Lookinf first at the systems side of things, poll the audience as to which channels they are currently using and explore the pros and cons of each.
- We understand that wrongdoing is more likely to occur in some locations and business operations than others. They’re just riskier. Arguably, these are the locations where it is most important to make reporting concerns as simple and straightforward as possible. But, in reality, how easy is it? Thinking about risk profile vs ease of reporting, I did a quick analysis looking at the bottom third of countries in Transparency International’s Corruption Perception Index and then cross referenced to the official language of the country and their main industries. What struck me was the prevalence of very high-risk industries (all the extractive industries, construction, tobacco etc.) in these very high-risk locations. What’s also interesting is the language profile of these countries. While the ‘official’ language may be English, French, Spanish or Portuguese, reflecting their colonial history, these are often multi-lingual societies where only a very small proportion of the population actually speaks the official language. There are a lot of other languages in the list too. Azerbaijani, Ukrainian, Russian, Lao, Bengali – in total I found 28 different official languages in TI’s 60 most corrupt countries. Many organisations’ reporting systems are still focused primarily on telephone-based hotlines, relying on someone making a conventional phone call to a call centre. The historical model is that someone dials a toll-free number and speaks to a call centre operative who can only speak to them in one of a limited number of languages. If the preferred language of the caller is not available immediately, then there is usually a process for engaging an interpreter in order to have a three-way conversation about the caller’s concerns. This just does not feel like a simple or straightforward process likely to encourage an apprehensive whistleblower to persevere and I’m not surprised that there’s been a noticeable and sustained decline in phone-based reporting over the past few years. It seems to me that, if alternative methods were easily available, people would choose them.
- Another interesting piece of research2 that I came across shows that penetration rates for mobile subscriptions in developing nations hit 98.7% at the end of 2017. On the surface this might be seen as a positive for hotline calling, but in my experience, many of the supposedly ‘toll free’ numbers are not, in fact, toll free when called from a mobile. The global uptake of mobile subscriptions has, however, led to a rapid growth in the use of mobile apps in developing nations3 - which is a great opportunity for a more innovative approach to reporting concerns. Coupled with advances in voice recording and machine translation the prevalence of mobile technology offers a genuine opportunity to rethink our approach to whistleblowing hotlines.
- If we are interested in doing more than simply ticking the box to say we have a whistleblowing solution in place, then we need to make it genuinely easy for employees to report concerns – especially in the riskiest parts of our business. That means taking advantage of the technology they do have and making it easy for them to say what they want quickly, easily and in their own language. So, does this mean that the traditional approach needs a re-think?
- Although the technical aspects of a whistleblowing system are vital to encourage use, perhaps even more important is the organisational culture.
- Studies consistently report that fear of retaliation, concerns around confidentiality and the involvement of management in the system prevent epole reporting concerns about wrongdoing.
- Ultimately it’s a issue of trust – which is apparently well founded…
- This is just one of many examples of whistle-blower retaliation.
- “I selected a random sample of lawsuits from the statewide cases reported in the LexisNexis database between 1994 and 2009. I keyed in the search term “whistle-blower” and found 380 cases involving whistle-blowers who sued their employers for alleged retaliation following the reporting of a wrongful act. I stratified the lawsuits chronologically by state and selected every fourth case to obtain a random sample of 95 cases. I conducted a content analysis of each case to identify: 1) the type of retaliation taken against the whistle-blower 2) the type of wrongdoing reported 3) the public policy issued 4) the outcome for the whistle-blower 5) the reason the whistle-blower won/lost the lawsuit 6) whether the whistle-blower was a public servant 7) the law used to file the case. MOST WHISTLE-BLOWERS ARE FIRED Seventy-four percent of the whistle-blowers in my review were terminated. Another 6 percent were suspended and 5 percent were transferred against their wishes. The remaining 15 percent were given poor evaluations, demoted or harassed. The results, summarized in Exhibit 1 (below), indicate that retaliation occurs, although this review can’t determine how often.”
- The rate of retaliation against employees for reporting wrongdoing doubled since 2013. While in past years of this research, ECI revealed that reporting and retaliation rise and fall together, what is most concerning is that in 2017, retaliation rose significantly higher than reporting – a 100% increase as opposed to a 7% increase in reporting.
- We’ve looked at some of the technical and cultural challenges that can undermine the effectiveness of your whistleblowing system. I’m now going to hand over to Mike Gleave from Lundbeck who’s going to talk about some the approaches he and his team took to overcome these barriers.
- Notes
- 1) What were the objectives that drove the establishment of your whistleblowing function?
- Questions: How many reports do you typically receive and what subjects do they cover? In which part of the organisation is your whistleblower function situated?
- Questions: What is the most popular method of reporting cases in your organisation? Do you receive reports from both internal and external parties?
- Do you have a non retaliation policy and is it actively enforced? Do you communicate internally consequences of serious misconduct substantiated via investigations? Do you disclose your hotline statistics in your annual report?
- How often do you have refresher campaigns for your whistleblower solution? What channels do you use?
- Notes
- Notes