ASX200 whistleblower policies sub-standard: ACSI

ASX200 whistleblower policies sub-standard: ACSI

The Australian Council of Superannuation Investors has conducted research, finding that the largest listed companies are falling short in providing adequate protection for whistleblowers.

The lobby group – which represents institutional investors on ESG issues – today published a report uncovering holes in the implementation of codes of conduct and whistleblower processes of ASX200 companies.

ACSI’s Codes of Conduct, Whistleblowing and Corporate Culture report revealed that corporate culture had come under the spotlight following a string of “scandals” that had prompted conduct-related investigations in recent years.

It pointed to ASIC’s report on major banks’ provision of non-compliant advice and APRA’s inquiry into CBA, following AUSTRAC’s allegations of anti-money laundering (AML).

The report found that while 199 of ASX200 companies did have a code of conduct, only 14 were found to demonstrate ‘leading practice’.

When compared against leading practice indicators, 67 per cent of ASX200 codes of conduct did not cover five of the 13 recommended topics, including “well-known business risks” such as fair dealing/product responsibility, data protection, cybercrime, and AML.

Furthermore, more than half (58 per cent) of the codes of conduct of ASX200 companies were either undated or had not been reviewed in the last two years.

ACSI chief executive Louise Davidson expressed doubts over companies’ commitment to implementing codes of conduct.

Our research suggests that many companies adopt a ‘set and forget’ mentality and don’t regularly review their code of conduct,” she said.

“Most do not have an introduction by the chief executive and don’t provide practical tools to help employees apply the code of conduct.”

Chief executives played a key role in corporate culture by “setting the tone from the top”, the report said.

It also found that ASX200 companies were not providing adequate safeguards for whistleblowers, a group that constituted “the initial source of detection for 39 per cent of frauds”.

However, 38 (19 per cent) of ASX200 codes of conduct did not refer to whistleblowing at all.

Whistleblowing is intrinsically linked to ethical conduct,” Ms Davidson said. “Yet we found that many whistleblowing systems omit critical features necessary to operate effectively and don’t adequately support or protect users.”

Most significantly, three key features of whistleblowing (the offer of anonymity, 24-hour availability and a statement that retaliation was unacceptable) were not disclosed in whistleblower policies to varying degrees by approximately half of ASX51-200 companies.

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