Independence and Compliance

The independence of service providers and compliance with legislation, recognised standards or corporate recommendations are now “mandatory” in protecting whistleblowers and establishing processes for the reporting of corrupt conduct or unethical behaviour.

The compliance of entities with good business ethics, sound risk management and legislative requirements has been subject to intense scrutiny following the collapse of Enron, Worldcom, Qwest and others in the USA in 2002. Australia’s own ethical and financial scandals have included One-Tel, AWB, Westpoint, Storm Financial Services etc. In recent times the Global Financial Crisis has highlighted poor management and improper practices, particularly in the financial services sector which have led the collapse of merchant banker Lehman Brothers, the Madoff Ponzi scheme and the consolidation of many financial institutions.

Does your whistleblower program do justice to the intent of your
Code of Conduct?
While many organisations may believe their whistleblowing program is “best practice”, evaluating the program should not only ensure that legislative requirements are satisfied, but more importantly does it satisfy the intent of your Code of Conduct. The term “Honesty and Integrity” is merely just “words” if compliance is not a core value.

Are you required to satisfy the relevant requirements of the
Australian Securities Exchange’s “Principles of Good Governance and
Best Practice Recommendations”?
The Australian Securities Exchange (ASX) has promulgated revised changes to the Principles of Good Governance effective from 1 January 2008. Under the amended Principle 3: “Promote ethical and responsible decision making”, the ASX has recommended that all codes of conduct should include: …measures the company adopts to encourage the reporting of unlawful or unethical behaviour and to actively promote ethical behaviour…how the company protects those, such as whistleblowers who report violations in good faith, and its processes for dealing with such reports”.

Principle 3 also references AS8004 “Whistleblower protection programs for entities” (see above)

Principle 7: “Recognise and manage risk” has been the subject of much debate as to what detail of risk companies must report; however STOPline has the capacity to effectively compliment existing risk management processes.

The ASX Good Governance Principles have based some of their expectations on the Australian Standards 8000 series. Irrespective of whether you are subject to the ASX guidelines, the guidelines are also becoming a template for many private, public and not-for-profit organisations who are seeking to enhance their corporate governance program.

Do you have the capacity to comply with the requirements of Standards Australia’s AS 8004-2003 “Whistleblower Protection Programs for Entities”?

Do you have the capacity to comply with the external reporting requirements of Standards Australia’s AS 8001-2008 “Fraud and Corruption Control”?
AS 8001 and AS 8004 recommend best practice include the use of an external reporting line such as STOPline. AS 8001 (para 4.3) prescribes the alternative means for staff reporting “of unethical or illegal behaviour”;

• Through normal reporting channel;
• Outside the normal reporting channels but within the entity; and
• Through reporting channels external to the entity.

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