Monday, March 05, 2018
03.17PM / Contributed by Barış Kalaycı for
Gün + Partners
Almost all whistleblowing reports are
evaluated quickly due to the urgency of the matter. However, if an evaluation
is completed without taking fundamental steps or necessary planning, it may
result in an improper investigation and eventually the inability to resolve the
issue, or even the undertaking of an unnecessary investigation.
of whistleblower reports
The majority of whistleblowers are
and are generally more cooperative in comparison to outsiders. However, some
matters reported by employees may become a labour law issue if no conclusion
can be reached. Even if the information reported by the employee has no
standing, it may provide evidence of potential corruption that could lead to an
investigation or highlight compliance measures that should be taken by the
Therefore, the evaluation should be
dealt with quickly and take into account not only the objectivity of the
information provided, but also the whistleblower – and particularly whether the
matter concerns a personal grievance or groundless allegation.
The whistleblower should be given
sufficient information about the steps that are taken if the report is not made
anonymously. A considerable number of anonymous whistleblowers are anxious to
receive feedback, frequently corresponding through temporary emails. Such
correspondence could enable the examiner to obtain more information about the
extent of the incident, as well as the evidence that should be collected. Where
the company will not take action against reported incidents, the whistleblowers
may consider reporting the allegation to outside sources; this could make it
almost impossible to investigate and control the incident.
The classification of the incident is
key to determining whether it should be investigated by the company. In some
cases, it may be necessary to report the incident to other competent
authorities directly, such as a parent company or judicial authorities (eg, the
police or the prosecution office). This may be done for the purposes of
collecting evidence, but it may be necessary if the incident constitutes a
crime (eg, fraud, theft or breach of trust). In this case, those responsible
for evaluating the incident must inform the legal authorities, as it is an
offence not to do so in many jurisdictions.
The competent authorities should be
notified within a reasonable time after completion of the evaluation or the
follow-up investigation, when it became evident that a crime had been
committed. However, it is important to consider whether the relevant offence
resulted in damages. In some cases, offences which have already been committed
and have consequences that cannot be remedied need not be reported to the authorities,
and instead may be dealt with internally.
The evaluation of incidents involving
only employees or third parties was altered by improvements in auditing and
inspection systems making the distinction between the terms increasingly difficult.
Now, considerable internal abuse cannot be conducted without the involvement of
third parties (eg, customers or service providers).
During evaluation, it is necessary to
determine the risk impact and effect of the incident on the company, and
whether and how far it will affect other employees or business partners (eg,
suppliers or customers); the incident may lead to serious consequences for the
company, beyond any cash losses already incurred or those likely to be incurred
in future (eg, reduced market share, large financial losses and business
losses). Similarly, reputational risk and loss of confidence from customers and
business partners should be taken into consideration.
Evaluations must be conducted by a
team rather than an individual. The team may span different areas of expertise
and its members should be determined on a case-by-case basis. For example,
members could include:
· a compliance manager;
· an internal audit manager,
· legal consultants;
· a financial director;
· a management representative;
· a human resources manager;
· an IT manager; or
· audit committee or ethics
committee members (or equivalent).
Those who have had a hostile
relationship or any conflict of interest with the whistleblower should take no
part in the evaluation process.
In major abuse allegations especially,
it is essential to include internal or external attorneys in legal analysis and
evaluation. In practice, external attorneys are also hired and most evaluation
meetings are held at law offices in order to maximise the benefits of
Whether the reported incident can be
verified by an objective investigation and whether it may be possible to
collect concrete evidence during a further in-depth investigation must also be
considered. Therefore, the availability of the following evidence should be
taken into consideration during evaluation:
· telephone records;
· computers; and
· other communications.
An investigation should not be
conducted where an incident cannot be verified under further investigation or
there is no available evidence.
Other evaluation criteria vary across
different businesses and sectors. However, a common criterion is the
reliability of the whistleblower. Although all employees should be treated
equally under labour law, in practice, the reliability of the employee who
reported the incident is taken into consideration.
Examination of the criteria and issues
during the initial evaluation should be assessed quickly and the decision as to
whether to conduct an investigation should be made as soon as possible. As time
passes, concerns about confidentiality may arise; the whistleblower may lose
confidence in the company or assume that the company will not take action. This
could mean that what should have been a simple internal investigation may be
reported to judicial authorities or the press, resulting in the loss of
reputation or business unnecessarily.
Therefore, in addition to the policies
intended for establishing the company's ethics culture and awareness on
anti-corruption, it is vital to adopt a policy on the evaluation and treatment
of future whistleblowers, inform employees accordingly and train decision
makers in the company.
information on this topic please contact Barış Kalaycı at Gün & Partners by email (firstname.lastname@example.org).
Association of Certified Fraud Examiners, Report
to the Nations on Occupational Fraud and Abuse, 2016.
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