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Top FTSE 100 companies fall short when it comes to whistleblowing best practice, finds survey by MDX researchers

03/12/2018
No FTSE firm appears to have introduced the public interest test in its policies, and no whistleblowing arrangements in evidence at all at some companies

Middlesex research reveals over a quarter of the top 100 FTSE companies still require disclosures to be made in good faith despite the removal of this test in 2013 legislation.

Professor David Lewis, Head of the Whistleblowing Research Unit at Middlesex University, led the latest study on whistleblowing. He fears that companies maintaining the good faith clause could deter whistleblowers from coming forward as they might suspect that their employers will focus on their motive rather than the message conveyed.

The fact that the survey reveals that none of the FTSE top 100 firms have adopted the statutory public interest test for disclosures of information is unsurprising, Professor Lewis says: “such firms are keen to have wrongdoing reported to them so that they can deal with it for their own benefit rather than that of the public.”

The survey also reveals that not all firms appear to have whistleblowing arrangements in place which has led the researchers to call for them to be mandatory in all sectors.  Not only would such a move be consistent with the current draft EU directive but it would accord with international best practice, they add.

"Our survey results are a mixed bag of encouraging and disappointing news. It's very disheartening that some companies still used a good faith test which may deter whistleblowers by focusing on their motive rather than their message." Professor David Lewis, Middlesex University

The study was conducted between August and November 2018 via a website survey of publicly available information about the whistle-blowing arrangements displayed by the FTSE top 100 firms. This was a follow-up to earlier postal surveys in 2007 and 2010 and marked the fact the relevant UK legislation (Public Interest Disclosure Act 1998) had been on the statute book for 20 years.

Commenting on the report, Professor Lewis said:

Our survey results are a mixed bag of encouraging and disappointing news.  It’s very disheartening that some companies still use a good faith test which may deter whistleblowers by focusing on their motive rather than their message.

“However, it’s positive to see that a quarter of firms have made their policies accessible to volunteers and interns who are not normally protected by the legislation, though we would like this figure to be higher still.”

Key findings include:

  • Over a quarter (28) of the FTSE top 100 still required disclosures of information to be made in good faith. None of the websites suggested that firms had incorporated the statutory public interest test into their procedure/policy.
  • Of the 10 firms who did not appear to mention such a procedure (or policy) on their website: 2 had under 500 staff; another 5 had 10,000 -100,000; 2 had 100,001 – 200, 000 and 1 had more than 200,001.
  • Over a quarter (26) firms gave protection to interns and volunteers by whistleblowing procedures.
  • The three most frequently used mechanisms for making people aware of the procedure were printed policy statements (69 firms); internet web pages (29 firms); and specifically  targeted training (17 firms).
  • The most frequently mentioned categories of reportable concerns were financial irregularities (70 firms); malpractice (67 firms) and health and safety (65 firms). These are in line with previous empirical studies but the researchers were interested to note the express mention of modern slavery by 15 firms and human rights by an additional 4.
  • In terms of mechanisms for reporting concerns, those featuring most frequently are telephone calls (46); oral reports (41); and emails (28). ‘Hotlines’ were also very common, with external ones being mentioned slightly more often than internal ones (31 compared to 27).
  • Consistent with previous research, confidentiality was more readily available (61 firms) than anonymity (35 firms).
  • 31 firms indicated that their procedure provided for disciplinary action to be taken against those who victimise a person reporting a concern.

This research was funded by the Department of Law and Politics at Middlesex University and conducted by Professor David Lewis and Tracy Boylin.

Find out more about studying Law at Middlesex.

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