In establishing an effective compliance program, an entity must put mechanisms in place so that questions may be easily raised and promptly addressed by knowledgeable officials. Problems may arise when well-meaning staff and those acting on behalf of an entity are unable to have their questions or concerns addressed in a timely manner. The absence of an easy-to-use mechanism for seeking guidance undermines the effectiveness of a compliance program. To enhance the likelihood that guidance will be sought and corrective action taken, procedures should not be cumbersome or perceived as being punitive in nature. A critical consideration in establishing a mechanism for anyone seeking guidance is that it be easy to use and free from any threat of retaliation.
The process should not be burdened with countless steps or bureaucratic requirements that lead to delay or impair confidentiality. Completing forms or exchanging electronic communications tend to inhibit candid and forthright communications. The best of all situations is having trusted and knowledgeable officials readily available to take a telephone call or meet privately.
Genuine efforts need to be made to ensure that anyone seeking guidance or making disclosures is not subject to retaliation. Even subtle forms of retaliation are not to be tolerated. Unequivocal support of top management is crucial. Compliance staff and key human resource staff must also be involved, and remain involved, to ensure that employees are not subject to adverse employment consequences.
But allegations known to be baseless must never be tolerated. Hotlines and other means of reporting questionable conduct cannot be allowed to be abused. This can be particularly difficult in view of the need to provide anonymous means of reporting questionable conduct. Yet even a disclosure made out of spite is not necessarily invalid. Compliance officials must always maintain the delicate balance between enforcing policies and at the same time serving as an effective and timely means of providing guidance.
“An effective compliance program should include a mechanism for an organization’s employees and others to report suspected or actual misconduct or violations of the [entity’s] policies on a confidential basis and without fear of retaliation.”1 “Whistleblowing procedures [should be] clear and accessible, and respect staff confidentiality.”2 A system needs to established whereby suspected violations may be reported without fear of retribution or going through the chain of command, including immediate managers. A “senior manager” should “oversee the whistleblowing . . . and [be] a point of contact [for individuals’] concerns about their line management.”3
1U.S. Dep’t of Justice & U.S. Sec. & Exch. Comm’n, A Resource Guide to the U.S. Foreign Corrupt Practices Act, at 58 (Nov. 2012), at 61 (footnote omitted).
2Financial Conduct Authority, Financial Crime: A Guide for Firms, pt. 1, at 19.
3Id., pt. 2, at 40.