95 percent of incidents reported straight to managers, not hotlines
Fear of retaliation and the assumption that no action will be taken are the top two obstacles to getting employees to speak up about misconduct. Creating a ‘speak-up’ culture that discourages retaliation against whistleblowers means training both employees and managers, a standing room-only audience learned at the Society of Corporate Compliance and Ethics’ 12th annual conference in Washington, DC this week.
Large bounties promised to whistleblowers by the SEC and a spate of recent court rulings have made a focus on anti-retaliation measures more critical than ever before, said Katherine Cooper Franklin, a partner at Littler Mendelson, who trains executives in how to minimize employment-related lawsuits.
‘We need to create a system where people feel safe and create a speak-up culture, otherwise employees will report externally,’ she said. The risk of being sued has risen in the wake of multiple Supreme Court decisions that expand the definition of what constitutes retaliation, she added.
Compliance departments need to create a distinct anti-retaliation policy and separate procedures for reporting acts of retaliation, she stressed.
The courts now consider disclosing the name of a whistleblower to your entire company a separate act of retaliation because of the ostracism that often follows, noted Earl ‘Chip’ Jones, also a partner at Littler Mendelson. Compliance officers ‘need to spell out the policy so that managers understand what decisions they make can be seen as retaliation,’ he said.
Franklin sees it as the most important training compliance officers can provide now and said it needs to be for managers as well as employees. Only 5.0 percent of incidents come in via the compliance hotline, while the remaining 95 percent are reported to middle managers, who need to know how to respond appropriately. Training should be live and should include role-playing to be able to assess body language and other signs of a manager’s attitude.
‘Compliance is about changing behavior. Retaliation is an innate reaction,’ said Franklin, reminding a roomful of compliance officers of how they reacted as five year-olds when another kid hit them on the playground.
‘We need to teach managers it’s illegal to act like a five-year-old in the workplace,’ she said.
The professional response required of executives when an employee reports a troublesome issue includes being respectful and saying ‘thank you’ with genuine understanding of how difficult the months ahead for that person may be as an incident is investigated, said Gretchen Winter, executive director of the Center for Professional Responsibility in Business and Society at the University of Illinois’ College of Business.
‘We’ve all seen ‘the look,’ right?’ she asked, referring to the reaction a manager often gives an employee, especially when approached while rushing to a meeting. There was immediate recognition in the room.
The look says ‘I want this meeting to be over’ and tells people you’re not going to act on what they report. ‘That gets communicated down through an organization and discourages other people from speaking up,’ she said.
Compliance officers should also use employee engagement surveys to know what the staff thinks of a manager and so a manager knows that those he supervises can influence his compensation or performance rating, said Jones.
Investigations into misconduct have to be fair and thorough to assure employees that their complaints are being taken seriously. Managers need to be trained to bring reported issues to the compliance officer instead of attempting an investigation alone, said Franklin.
‘I tell middle managers that their insurance policy against personal liability in court for a speak-up case is going to the compliance officer,’ she said.
During and even after an investigation, it’s recommended that a compliance officer schedule regular informal follow-up with a person who has raised an issue to update her on the status of an investigation, see how she’s doing and generally build rapport.
‘It can be a one- or two-minute conversation,’ Franklin said. ‘It’s also a way to proactively discover if there’s been retaliation, which would demand a separate investigation.’
