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CCCA_V4No3_Dept-Ethics-V2.qxd:CCCA_V1No2_Dept-CourtLeg-V1.qxd 9/2/10 7:33 AM Page 17 A question of trust and integrity Ethics A whistleblower hotline can be an effective part of a strong compliance and ethics program, provided complaints are handled properly. By Christa Wessel t wasn’t so long ago that spilling the on financial irregularities and fraud, con- up a whistleblower program, ensuring Ibeans on fellow colleagues was flicts of interest and workplace harassment. that it is suited to their organization and frowned upon. But that was before a It’s also a key component of any ethics that it follows best practices. A common string of corporate financial scandals and compliance program — practically a form of reporting mechanism is a whistle- during the last decade forced regula- must in today’s good corporate governance blower hotline. tors to adopt laws aimed at protecting toolkit. In the U.S.,whistleblower programs But while the design and set-up is cru- whistleblowers and sometimes even are mandated under the Sarbanes-Oxley Act cially important, the effectiveness of the mandating whistleblower programs. of 2002. They are encouraged as part of whistleblower program will depend on In response, a growing number of com- good governance under the U.S. Federal what happens after a complaint is filed. panies have discovered that early warnings Sentencing Guidelines and in Canada under And the whistleblower’s perceptions on — coming from their own ranks — are the Multi-lateral Instrument 52-110 pertaining this score begin to be formed from the best defence against internal risks that can toAudit Committees,which are required to moment the complaint is filed. potentially wreak havoc to their reputation. establish a complaint procedure. Internat- The typical whistleblower is an employ- But the key to the success of any ionally, whistleblower programs are recom- ee who, on the job, learns of some mis- whistleblower program is how well com- mended by organizations such as the conduct or information that could be plaints are handled by the organization. OECD,Transparency International and the damaging to his organization. Often, by ISTOCKPHOTO Indeed, a whistleblower program, provid- International Chamber of Commerce. the time the decision is made to call the hotline, the employee has already brought Organizations spend considerable time, ed it is trusted by employees, can be an the matter to management’s attention. effective method of gathering intelligence effort and money designing and setting AUTOMNE 2010 CCCA Canadian Corporate Counsel Association 17