The thesaurus lists “whistleblower” with “blabbermouth, busybody, fink, nark, rat, and snitch,” all as pseudonyms for “tattletale.” However, nobody told Congress about the negative connotations of reporting misconduct to the authorities. Federal law has long encouraged whistleblowers. Now, the Dodd-Frank Wall Street Reform and Consumer Protection Act takes a huge step forward in whistleblower protection.
A strong internal whistle-blowing program is the bank’s best means of preventing fraud and serious misconduct. HR plays a crucial role, not just in ensuring minimal compliance with legal requirements, but in creating an environment where employees are encouraged to speak up without fear of retaliation.
An essential first step is the establishment of an ethics hotline. The FDIC has issued guidelines to ensure the hotline’s effectiveness, focusing on these seven areas: awareness, defining reportable events, adequate resources, use of a third-party provider for credibility, privacy and confidentiality, incident tracking, and investigation and follow up.
It takes time and consistent communication and enforcement to change the reticence of both employees and managers towards whistle-blowing. The obstacles that dissuade employees from speaking up need to be acknowledged and addressed, while at the same time working thoughtfully through the reasons why executives may be reluctant to recognize whistleblowers, if not as superheroes, at least as the foot soldiers of an effective compliance program.[This is an excerpt from a blog posted in the ABA Banking Journal Online.]