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ASIC issues corporate whistleblower guidance

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By Charbel Kadib
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4 minute read

The corporate watchdog has published findings from a review of whistleblower programs developed by major Australian firms, including four financial services entities.

The Australian Securities and Investments Commission (ASIC) has released a 23-page report — Good practices for handling whistleblower disclosures — detailing findings from a 2022 review of whistleblower programs developed by seven sample firms.

The review aimed to identify “scalable good practices” to form the basis of new guidance for corporate Australia, drawing from the strengths of the programs of the sample firms — ANZ Banking Group, AustralianSuper, BHP Group, Commonwealth Bank of Australia, Netwealth Group, Treasury Wine Estates, and Woolworths Group.

According to ASIC, programs with “thoughtful and well-publicised” whistleblower protection regimes received “useful reports and tip-offs” relating to concerns in the workplace.

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This reportedly supported early detection, providing sample firms with “greater opportunity to identify and address” issues raised by whistleblowers.

The good practices identified by ASIC include:

  • Establishing a strong foundation — procedures and systems to embed the program’s requirements;
  • Tangible efforts to foster culture and practices to support whistleblowers;
  • Informing and training personnel involved in receiving or handling disclosures, particularly about protecting whistleblowers and treating material confidentially;
  • Monitoring, reviewing, and improving the program, including seeking feedback from whistleblowers;
  • Using information from disclosures to address underlying harms and improve company performance;
  • Embedding senior executive accountability for the program; and
  • Creating frameworks to entrench effective director oversight.
ASIC acknowledged, however, programs developed to manage whistleblowing would be shaped by the “nature, size, scale, and complexity” of a firm’s business.

As such, ASIC said it would expect firms to consider how good practices identified from its review can be modified to “suit their operations”.

‘Whistleblowing is a key part of a transparent, accountable, and safe work culture,” ASIC commissioner Danielle Press said following the release of the report.

“Whistleblowers need to know that, when they have reasonable grounds to suspect misconduct or an improper situation involving a firm, they can raise the issue without being victimised.

“ASIC’s report reiterates the important role that whistleblower programs play in alerting entities and boards to changes necessary to help improve overall corporate performance and governance.”

In an address to the Australian Institute of Company Directors (AICD) on Thursday (2 March), ASIC chair Joe Longo urged corporate Australia to step up to the plate.

“…You have a key role in ensuring your company’s whistleblower program is useful and effective,” he said during his opening remarks at the AICD’s Australian Governance Summit.

“A culture of compliance and transparency cannot be mere lip service.”

ASIC has committed to continuing reviewing whistleblower policies and arrangements for handling disclosures, including when receiving reports from whistleblowers alleging breaches of the relevant protections.

If serious harm is identified, ASIC has stressed it would consider the “full range of regulatory tools available”, including civil or criminal enforcement action.

ASIC recently commenced civil penalty proceedings in the Federal Court against Queensland-based coal producer TerraCom Limited, its managing director Daniel McCarthy, chief commercial officer Nathan Boom, former chair Wallace King, and former director and deputy chair Craig Ransley.

The matter relates the firm’s handling of whistleblower allegations made by a former employee, who exposed the company for falsifying coal quality results.

At the time of the announcement, ASIC deputy chair Sarah Court noted the significance of the enforcement action, given it was the first time the regulator launched proceedings in response to alleged breaches of whistleblower provisions.

“Whistleblowers perform a vital role in identifying and calling out corporate misconduct,’ Ms Court said.

“We take any indication that companies are engaging in conduct that harms or deters whistleblowers very seriously.”

 

ASIC issues corporate whistleblower guidance

The corporate watchdog has published findings from a review of whistleblower programs developed by major Australian firms, including four financial services entities.

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