RETAIL ENVIRONMENT
Whistle where you work
According to figures, up to 40 percent of all retail shrinkage can be attributed to employee theft, which points to a seismic challenge for LP staff.
Many retailers have whistle-blowing hotlines, either monitored by HR or external organisations. But there is also a concern over anonymity—the fact that their name could get back to those who are being reported.
Indeed, many LP practitioners that have such hotlines suggest that they are not widely used, even when widely advertised and incentives are offered.
This is not the fault of the retailers, but goes to a deep cultural issue that has been highlighted by two major studies into whistle-blowing—one across the twenty-eight E.U. countries and the other specifically in the U.K. where protection for whistle-blowing is given legal status.
International pressure group Transparency International wrote a 99-page report looking at the adequacy of whistle-blower protection laws of the twenty-eight member countries of the European Union. It also looks at a range of political, social, and other factors that promote or discourage whistle-blowing in the workplace, and that enable or inhibit the enactment of whistle-blower laws in E.U. countries.
Written in November last year, the report identifies general and specific issues in need of improvement, both in terms of strengthening whistle-blower protection for employees and for enhancing the acceptance and appreciation of the practice.
Legal Protections
The report found that only four E.U. countries have legal frameworks for whistle-blower protection that are considered to be advanced—Luxembourg, Romania, Slovenia, and the United Kingdom.
Of the other E.U. countries, sixteen have partial legal protections for employees who come forward to report wrongdoing. The remaining countries have either very limited or no legal frameworks.
Moreover, many whistle-blower provisions that are currently in place contain loopholes and exceptions. The result is that employees who believe they are protected from retaliation could discover, after they blow the whistle, that they actually have no legal recourse.
Without sufficient legal protection and reliable avenues to report wrongdoing, employees throughout Europe face being fired, demoted, or harassed if they expose corruption and other crimes. With would-be whistle-blowers inhibited from coming forward, taxpayer money, public property, environmental resources, and even lives may be at risk, argue the authors.
Encouragingly, several E.U. countries in recent years have taken steps to strengthen whistle-blower rights, including Austria, Belgium, Denmark, France, Hungary, Italy, Luxembourg, Malta, Romania, and Slovenia. Countries that have issued proposals or have announced plans for proposed laws include Finland, Greece, Ireland, the Netherlands, and Slovakia.
“Despite these signs of progress, much remains to be done toward ensuring that whistle-blowers in the E.U. receive the protection they deserve under European and international standards. Political will is lacking in many countries. More whistle-blower laws would be in place today had government leaders followed through on their commitments to pass and enforce them,” the report says.
“Transparency International urges all E.U. countries to enshrine comprehensive whistle-blower rights into their laws and begin a public dialogue that will lead to a greater appreciation of whistle-blowers as important figures in the fight against corruption. The European Commission should follow the call by the European Parliament in October 2013 to submit a legislative proposal establishing an effective and comprehensive whistle-blower protection programme in the public and private sectors.
“Whistle-blowing carries professional and personal risks. E.U. citizens and residents should consider using safe avenues to report corruption or other serious wrongdoing in their workplace and seek the best available advice before doing so,” the report concludes.
Although there is a largely positive message from this report, another survey from the whistle-blowing charity Public Concern at Work and international fraud experts EY looked across a wide range of business sectors and concluded that U.K. organisations are merely paying “lip service” to whistle-blowing.
This follows on from a YouGov report in June last year that said that 22 percent would not raise a concern through fear of reprisal.
The survey of thirty different sectors found that although 93 percent of respondents said they have formal whistle-blowing arrangements in place, one in three think their arrangements are not effective. A further 54 percent said they do not train key members of staff designated to receive concerns, and 44 percent confuse personal complaints with whistle-blowing. In addition, one in ten say their arrangements are not clearly endorsed by senior management.
The survey asked almost 200 senior staff about their company’s individual whistle-blowing policy, representing the most in-depth and comprehensive survey of this kind to date.
Professional Acceptance
Cathy James, Chief Executive at Public Concern at Work, commented, “While it is encouraging that a large number of companies have formal whistle-blowing policies in place, it is deeply worrying to see how these policies are being implemented and managed. There appears to be a box-ticking culture emerging, rubber-stamping policies that are not effective and do not provide advice and support to whistle-blowers. This could lead to serious issues being unreported or ignored. Training for staff dealing with whistle-blowing concerns, which can be extremely complicated and often sector specific, appears to be woefully inadequate.”
The survey also highlights a lack of clarity over who is responsible for the day-to-day running of whistle-blowing arrangements, with over nine different departments claiming responsibility.
John Smart, EY head of Fraud Investigation and Dispute Services, said, “Having an effective whistle-blowing policy in place is crucial to any organisation’s attempt to tackle its fraud or corruption risks. The reality is that many companies either do not fully understand their whistle-blowing arrangements, or fail to have confidence in them.
“Despite so many high-profile investigations over the past few years, many complaints are still ignored and those who blow the whistle on malpractice are marginalised. To be effective, it is essential that the whistle-blowing arrangement is well-advertised and is trusted by those who may use it. Confidentiality and protection of the whistle-blower are key aspects of trust, as is demonstrating that a complaint will be taken seriously. A key feature is the need for adequately resourced and suitably experienced personnel being responsible for the triaging of reports,” added Smart.
Cathy James concluded, “Recent scandals in many sectors, including banking, healthcare, construction and even in the media, might have been prevented if it had been easier and safer to speak up and whistle-blowers had been listened to. It is time for companies and the regulators alike to take the problem seriously.”
Herein lies the problem for many retailers, as many employees fear reprisal and prefer to maintain the status quo than be seen as an informant. There does need to be more Government guidance and encouragement rather than the mixed messages that have been daily headlines in recent weeks and months. Whatever their political motives, Edward Snowdon and Julian Estrange are the epitome of speaking out and the international community has demonised them for so doing. Conversely, in everyday commerce, we need to reach a point where whistle-blowers are recognised as brave heroes speaking out rather than marginalised individuals. This is the inconvenient truth.
