The level of compliance with local and overseas legislation, Australian Standards, Codes of Conduct and Business Best Practice will be determined by the commitment of senior management and the organisational desire to position itself as a leading proponent of effective good governance and risk management.
Detailed in the section are some of the questions any organisation should ask itself. Together with the Whistleblowing Program Checklist, you will be well on the way to establishing an effective program.
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 improper 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. 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.
In recent times, the business practices of Note Printing Australia (a subsidiary of the Reserve Bank of Australia) have been subject to investigation and enhanced scrutiny.
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”?
- Through normal reporting channel;
- Outside the normal reporting channels but within the entity; and
- Through reporting channels external to the entity.
Under Part 9.4AAA, “any officer or employee of the company or contractor supplying goods or services, or contractor’s employee can qualify for protection when making a disclosure.” The legislation allows disclosures to be made to ASIC, the company’s auditor or member of the audit team, a company director or senior manager or a person authorised by the company to receive such disclosures (e.g. STOPline). The use of STOPline can allow anonymity under the Corporations Act.
Note: see Resources for other Australian legislation with whistleblower provisions
STOPline provides a simple, cost effective solution for the establishment of procedures for:
“(A) the receipt, retention, and treatment of complaints received by the issuer of concerns regarding questionable accounting controls, or auditing matters; and
(B) the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting and auditing matters.”
With the requirement to apply J-SOX for fiscal years beginning on or after April 1, 2008, Japanese companies are specifically required managerially assessing internal controls and providing for the independent audit of the effectiveness of such controls. STOPline aids in satisfying these demands.