Last week the FCA issued a publication outlining its findings from a recent review of firms’ whistleblowing arrangements, identifying areas of good practice and areas for improvement. Unsurprisingly, the need for specific, tailored training on whistleblowing was highlighted as a key area for improvement. The FCA is now encouraging all firms to review and improve their whistleblowing arrangements. Whilst we are seeing lots of businesses and organisations review their existing whistleblowing arrangements, the recent FCA publication and the requirements set out in the new Corporate Governance Code requiring organisations to have a means in place for employees to raise any matters of concern, show that employers need to do more than just update their whistleblowing policies and appoint a designated champion and that training and education is key.

The FCA’s whistleblowing rules, which were implemented in September 2016, require firms to have effective arrangements in place for employees to raise concerns, ensure concerns are handled appropriately and confidentiality. Firms must also appoint a whistleblowers’ champion to ensure there is senior management oversight over the integrity, independence and effectiveness of a firm’s arrangements.

It comes as no surprise that the FCA are supervising what firms are doing in this space, as the recent enforcement actions have shown the seriousness with which the regulators are considering whistleblowing failings. The key findings from the FCA’s recent report include:

• The new rules have helped to ensure that firms have effective whistleblowing arrangements in place;
• The role of appointed whistleblowers’ champions is working. They are providing independent oversight and accountability as well as raising the profile of whistleblowing within organisations;
• Firms generally need to improve documentation of their investigation processes (e.g. for assessing and rating the information received, protecting confidentiality, investigating and escalating concerns) and the practical arrangements for protecting whistleblowers against victimisation;
• The effectiveness of whistleblowing arrangements should be assessed through second and third line of defence reviews or third-party reviews;
• Some annual reports to the Board were too high level, especially where there was a low volume of whistleblowing disclosures;
• Staff surveys were highlighted as a possible means of assessing staff understanding of the whistleblowing process and the degree of confidence held by staff in using it without fear of victimisation.

The new Corporate Governance code also expects companies to promote transparency and integrity in their businesses and enhance workers’ concerns in the workplace, by ensuring that workforce policies and practices are consistent with the company’s values and the workforce is able to raise any matters of concern (not just protected disclosures). In particular, it expects companies to have in place a means for the workforce to raise concerns in confidence and anonymously. The code also requires the boards of companies to routinely review their reporting arrangements to ensure that arrangements are in place for the proportionate and independent investigation of these matters and for follow up action.

The key takeaways from this are that:

• Financial firms and organisations are in the spotlight for their whistleblowing arrangements;
• We expect this focus will continue into 2019 and as such employers shouldn’t become complacent in relation to existing arrangements;
• Whilst we are seeing an increase in firms and organisations reviewing and updating their whistleblowing arrangements, the new Corporate Governance Code and FCA publication shows that organisations continually have to keep their reporting arrangements under review and this means more than just having a whistleblowing policy dealing with protected disclosures.

What is also clear is that, whilst implementing new policies and systems is important, so is educating and training those who are involved in the operation of a firm’s whistleblowing arrangements, whether that is supporting a whistleblower, ensuring the proper escalation of an issue or for those conducting whistleblowing investigations.

If your organisation would benefit from training, we have designed training to help organisations meet their obligations under the whistleblowing rules. We are also refreshing our Listen Up campaign in the new year....so watch this space!