Whistleblowing in SMEs

IN their “Report To The Nations 2020 Global Study on Occupational Fraud and Abuse”, the Association of Certified Fraud Examiners (ACFE) noted that 43% of the “schemes” from over 2,000 cases surveyed were reportedly detected through a “tip”.

This shows that having a whistleblowing (WB) channel is useful for any organisation in the investigation of fraud, corruption, bribery and misconduct.

I have spent almost 10 years in a public accounting firm investigating fraud, corruption, bribery and misconduct in the private sphere, and I agree that WB channels are quite powerful.

So why aren’t small and medium-sized enterprises (SMEs) actively setting it up?

The brutal truth is the cost of implementing an end-to-end whistleblowing solution, which can run into six figures.

But here’s a cheat sheet based on my own experience and research for SMEs to consider.

1. Come up with a simple one or two-page whistleblowing policy. State your commitment to look into complaints received, define what can be reported through the WB channel, the good faith requirements and protection against retaliation.

2. Create the channel. The easiest/cheapest option would be a dedicated email account and a WhatsApp number. I have also found European WB channels that are available for free online. These web-based platforms allow two-way communication with the complainant and some basic case management features.

3. Launch the channel. Work with your corporate communications team or get your sales and marketing team involved for ideas. This can be a simple email blast to all your employees (can also be extended to suppliers/contractors) or run a simple quiz offering a couple of free gifts. Print out simple cards and/or include information on the ways to access the channel during your regular training sessions. The objective is to get the word out.

4. Think about what happens once a report is received. Agree on who will perform the triage (deciding to chuck the report or doing something about it) and who will investigate and present the findings. Get some senior people involved.

5. Reinforce the channel. Every couple of months, tell your users (employees and suppliers) how many complaints were received and what action was taken (just the number, not the intimate details). This will show users or potential users that you take the channel seriously. Do a full review every two years or so.


Chartered accountant and certified fraud examiner

Shah Alam

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