Implementing an effective whistle-blower (WB) system is a crucial element of an organization’s corporate governance, mandated by regulation and industry best practices. However, in this implementation organizations face a dilemma: should the system reside within the organization, and if not, which parts should be provided by a third party?
This article considers some of the issues related to investigations, a crucial part of the whistle-blower system, which ultimately will define the success and the value the WB system can create for the organization, or whether it will fail.
View from the field
Recently, I was facilitating a staff workshop on complaints handling, on a large humanitarian operation in one of the hotspots in Africa. We were focusing on the prevention of sexual exploitation and abuse (PSEA). In discussions, it becomes evident that “things” are happening, both between staff members and with the project participants, but rarely any of those were reported. Whilst consensus was that no force or threat was involved in most cases, these “things” involved in one way or another a power difference, which everyone agreed would implicate SEA. This was among well-PSEA-trained staff with a good understanding of complaints handling, safeguarding, and a full briefing on organizational non-retaliation policy.
Why? The biggest constraint on reporting was the reason that “everyone knew” that once you report the misconduct, the relative confidentiality of the process will at some point cause a leak of the identity of the whistleblower. Even, if there are no direct consequences, the staff members’ careers would halt. Normal promotions would be delayed, or contracts may not be renewed. “Everyone knows” that you are the difficult one, who causes trouble to operations. – Even when the same “everyone” agrees that perpetrators must be stopped.
Limitations of efficient internal whistle-blow response
Confidentiality
In the above case, operational complaints were handled locally, and the Head Office (HO) responded to the serious ones including fraud and Sexual Exploitation and Abuse (SEA). A common approach within NGOs, and by Core Humanitarian Standard on Quality and Accountability. In-country offices and HO, teams were well established, and staff relations were good. Meaning that most people knew each other very well and trusted each other. In the crisis areas, we literally trust our lives in the hands of our fellow workers. So, it is a perfectly understandable human peculiarity, that at some point even confidential information leaks. Thus, very soon, the information about the WB is out, and there are highly likely indications of who made it.
When an investigator enters the scene for a fact-finding mission, the rumor of WB is confirmed and it becomes a justification to compare notes, as “everyone already knows” about it. Reputational risks on both, the whistle-blower and the subject are high and may cause permanent damage, should the allegation be sustained or not.
Objectivity
Social- or financial pressure may affect the objectivity of the investigation. The investigator may know some colleagues from the unit, which can cause bias both in the work planning and/or in the analysis of evidence. Also, the risk for undue influence increases, if the investigator is located on the reporting line of a person responsible for the operations investigated, or its controls, or to a person who is close to the supervisor. Even if there is no direct pressure from the organization, inherent group dynamics mean we tend to protect our own. This human quality, however, may breach the objectivity of the investigation.
Healing of the team
The trust between the team members is always affected when misconduct happens, and the team spirit will get damaged. At a minimum, the team may be unable to perform at its best level. Apart from the bias of having to investigate your own, internal investigations will cause deeper and lengthier damage to the team as the investigators remain in your eyesight. Mental energy does not get directed in the correct direction preventing effective healing of the team.
Sufficient resourcing
Whistle blows tend to arrive in batches, causing resourcing challenges and possible lead time delays. Timely action will provide the most effective response to WB. It provides high-quality evidence and enables a shorter investigation time. A more important factor is that it prevents the perpetrator cause further harm to survivors, other staff, or the organization. Internally, it is difficult to recruit the right number of investigators and investigation managers to enable sufficient scaling of investigations. The need varies and to prevent idle time, some organizations assign the investigators also other responsibilities. However, investigations will be prioritized, which may delay the completion of other tasks.
Unified response
In the above case, the organization had worked years on developing a good response system and had a person dedicated to the WB cases. However, the management of the investigation becomes a bottleneck, as it unfortunately often happens. The fluctuating volume of complaints meant that when the focal point was busy with investigations elsewhere, someone else handled the incoming complaints process, which caused variability in the response. Process variability will prevent management to build a complete compliance risk picture, and again it causes concerns to a potential whistleblower who weighs the benefits against the risks of becoming a complainant. Non-standard procedures also increase the risk of disappearing cases.
Trust in the system
I have experienced a contradiction of receiving only a few, if any WBs, from some of the highest SEA risk operations, where typically also the gender dynamics and the environment prevents effective security measures. Whilst at the same time multiple staff approached with their concerns from low-risk locations, where people held higher confidence in the system and overall quality of management. I am sure that the trust in the system and its confidentiality, environmental factors, and the assumed gain achieved will have an effect when someone considers a WB and takes a risk of possible consequences.
Quality of investigation
An additional consideration is the quality of the investigation. Most organizations make the decision of disciplinary procedure solely based on the investigation report. Therefore, consistency and integrity of the investigation and reporting are required to prevent increased risk of legal suits.
The investigator is likely to be in interaction with a potentially nervous whistle-blower, witnesses who may have something to hide, and a potentially aggressive subject of the investigation. All require good people skills and a seasoned investigator’s approach. Especially in SEA cases, the evidence is likely to consist mostly of statements, thus requiring an experienced person to conduct the interviews to both have a full picture of the incident and to verify the correctness of the statement.
The above experience and discussions with several compliance colleagues in other organizations have underlined the benefits of utilizing independent external service providers on investigations. Some of them also correctly points out the need to concentrate on core business, and to outsource the whistleblowing/complaints handling altogether.
Internal / External, Considerations
Specific organizational needs define the optimal level of outsourcing. The nature of operations and the market, geographical scope, internal resources and -capacity, financial resources, and the availability of services, will influence the decision of how the whistleblowing cases should be handled.
If the aim is to achieve the full benefits of the whistle-blowing system, we should get a report of all misconduct allegations possible. So, is a whistleblower more likely to report through an internal or external hotline, and should it be investigated internally or externally?
Unfortunately, studies on the trust of the system provide directly contradictory conclusions: the internal argument is that whistleblowers will contact the internal system more easily, as they believe their information will remain in-house, and the external argument is that whistleblowers will contact the external line because they believe their information is less likely to be leaked or handled by someone they know.
All organizations have a unique business case and a thorough analysis of the level of outsourcing should be conducted to define an optimal split between internal case management and outsourcing.
Position of whistle-blow function in the organizational chart
Whilst outsourcing secures the independence of the investigation, the organizational independence of the function necessitates the consideration of the organizational location of the whistle-blow focal point. As described above, it may be unfair for the focal point to be in a position where investigations may concern the actions of his/her supervisors, or to investigate one of their colleagues.
However, such conflicts of interest cannot be completely removed, not even in large organizations. Consideration of how much independence is enough depends on the specific attributes of the organization. Whereas in large organizations, geographical distance or different divisions can provide sufficient seclusion, and the resources may enable a separate position reporting directly to senior management, in a small/medium size organization, there might just not be enough diversity of tasks to enable the segregation of duties or available funding for such a position.
Outsourcing the WB handling is a possible solution to secure functions independence and objectivity whilst utilizing the WB system benefits fully all sizes of organizations.
Overall
Whistle-blow case handling remains at the very heart of organizational reliability, which has its basis in ethical business practices. I would conclude the main benefits of outsourcing the whistle-blow handling and investigations in six aspects:
- Integrity and Objectivity: Outsourcing secures against conflicts of interests and presumptions. It also increases the reliability of case handling.
- Confidentiality: Reporting and communication are strictly along the official line. In the best-case scenario, management can announce a resumption before speculation begins.
- Quality: Case handling, including the investigations, is conducted according to international standards. Procedural fault risk is minimized, and the weight of evidence is secured.
- Availability of skilled case handlers: External service providers can deploy skilled case handlers at a short notice. Early response increases the quality of evidence and reduces loss.
- Less operational damage: External case handling and investigation limits damage to the work atmosphere and enable an effective healing process after the conclusion. The management has a complete picture of the compliance situation and trends.
- Optimal Investment: The organization will only acquire the required service and number of investigation days. Misconduct claims typically occur in batches, for which a scalable service can respond.
Author
Ville Lehtinen is a specialist in securing operational reliability, including complaints handling and investigations. His background includes multiple roles in managing internal audits, investigations, and PSEA across the humanitarian and development aid sector for the past 17 years.
His training and certifications include MBA in International Business, CHS-approved Fraud and SEA investigator, and a trainer for sensitive investigations. He is also a member of the Ethical Committee of the Institute of Internal Auditors in Finland. Ethical business practices are the area of his professional special interest.