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Is your whistleblowing policy up to scratch?

Nov 02, 2022

With the Protected Disclosures (Amendment) Act 2022 now signed into law, companies must ensure they are up to speed with new requirements, writes Ita Gibney

As we emerge from the pandemic, we have entered a phase of overwhelming change. We are heading into inflationary times, the Ukrainian–Russian war looks set to be prolonged, a recession is imminent, and a new world of work is emerging, as companies consider their cost base and margin pressure—whether it’s office space, employee numbers or energy costs.

Such adversity creates increased risk and additional scope for negative news, making it imperative for companies to manage their communications with even greater skill and care.

Accountants, as close advisors, are often called upon for advice in this area, which is not always their field of expertise. Liquidators and receivers, in particular, will be under pressure as they work through the fall-out of corporate challenges in the period ahead.

Against this backdrop, businesses are also trying to be socially conscious and to run responsible, sustainable ventures. Purpose is now seen as being every bit as important as profit. Stakeholder capitalism is part of the valuation equation. Good governance, ethical behaviour and sustainability are now on a par with risk management and legal compliance.

And, recent whistleblowing cases concerning both Uber and Twitter demonstrate just how fast reputations can sink when a corporate entity finds itself in the glare of negative publicity.

Updates to Ireland’s whistleblower regime

In Ireland, the Protected Disclosures (Amendment) Act 2022 has brought significant change to our whistleblower regime, including greater risks for companies, especially those engaged in unethical practices or breaches of law.

The updates build on the protections offered in 2014 under the Protected Disclosures Act. Now, a wider scope of categories of worker will be protected, including volunteers, board members, shareholders, and job applicants. Further, the definition of penalisation has been expanded to cover more covert acts, including negative performance appraisals or withholding promotions. Most notably, the amendments put the burden of proof firmly with the employer.

For corporate entities of 50 employees or more, the Act requires that they establish, maintain and operate internal reporting channels and procedures for the making of protected disclosures. The importance of having policies and processes for protected disclosures provides an avenue for the whistleblower to go through prior to reaching out to external sources. Entities will need to be aware of, and know how to, manage their risks prior to a disclosure.

Prevention is better than a cure

Under the new legislation, there is now a greater risk of a whistleblower going public. Whistleblower procedures, then, must be part of wider corporate reputation strategies, recognising that crisis prevention is the key to corporate health.

There is a renewed drive towards unionisation of workers, and a backlash against the gig economy and poor workplace cultures, especially for new market entrants. Work cultures, if found to be negative, are quickly trending on social media, affecting recruitment as well as reputation. Companies need to be quick, consistent and authentic when it comes to protecting their brand against public scrutiny.

All the experts in the world will advise that it is wiser to prevent a crisis than to handle one. A good CEO will manage the risks hands-on, test the crisis communication plans, have good independent counsel to plan for any potential bad that may arise in the future. Companies will forge great reputations, not just because they have great products and services, but also because they take full account, in advance, of the public impact of their corporate footprint.

CEOs and boards must take heed—never has corporate reputation and maintaining the trust of stakeholders been such a critical factor in preserving business value.

Ita Gibney is Chair of Gibney Communications

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