ASX200 companies fail in whistle-blower support
The Australian Council of Superannuation Investors (ASCI) has hit out at ASX200 companies for failing to support and protect whistle-blowers, finding that 38 ASX200 companies did not mention whistleblowing or how to report wrongdoing in their codes of conduct.
Research by the organisation found that many did not mention anonymity, accessibility or the avoidance of retaliation, which were key features of effective whistleblowing systems.
ACSI said that this was a significant oversight, as whistleblowing was intrinsically linked to ethical conduct. It was also problematic as whistleblowing is the initial source for a significant number of detected frauds.
“Unless codes of conduct provide guidance to employers on where to go to report misconduct and other important information such as how reporters will be protected then how can companies expect their whistleblowing systems to be effective? We think this is a significant missed opportunity,” ASCI chief executive, Louise Davidson, said.
ASCI also found that ASX200 companies were failing to address key risk areas in their codes of conduct. Its research found that fewer than two-thirds of companies cover five of 13 recommended topics in their codes, omitting many well-known business risks such as fair dealing, cybercrime, anti-money laundering and human rights.
The organisation warned that this could contribute to poor corporate cultures.
“Codes of conduct … are key foundations for good corporate culture. Effective design and implementation encourages ethical performance by employees and protects against inappropriate behaviour, but the quality and implementation of these resources is critical,” it said.
Davidson said that many companies did not properly support the implementation of their codes, with most failing to include an introduction by the CEO or practical tools to assist employees in the codes’ application, and were not regularly reviewed.
She said that companies having such large gaps in their codes of conduct and whistleblowing systems “represented a material risk to their reputation, licence to operate and value.”
AUTHOR
Hannah Wootton
Recommended for you
The Reserve Bank of Australia (RBA) has lowered rates to a level not seen since mid-2023.
Financial Services Minister Stephen Jones has shared further details on the second tranche of the Delivering Better Financial Outcomes reforms including modernising best interests duty and reforming Statements of Advice.
The Federal Court has found a company director guilty of operating unregistered managed investment schemes and carrying on a financial services business without holding an AFSL.
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
