Original article by Mark Eggleton in the Australian Financial Review

Australian organisations need to make employees feel that reporting wrongdoing is the right thing to do, especially in the wake of recent events in the financial sector as well as at retailers such as 7-Eleven.

This was one of the key points raised at the recent Risk Culture roundtable co-hosted by The Australian Financial Review and KPMG.

Managing director of the Australian Bankers’ Association, Steven Munchenberg, says there needs to be a major focus on transparency and accountability and part of that is about “making people feel it’s the right thing to do to blow the whistle internally and, if they are still not satisfied, externally”.

ASIC Commissioner John Price agreed Australian organisations need to change the ingrained idea that it’s not right to “dob” on your colleagues, which is a hangover from most of our school days.

KPMG’s national industry leader, financial services, Adrian Fisk says we are teaching people that you don’t raise a problem unless you’ve got solutions.

This call for people to come forward comes at an increasingly febrile time for whistleblowers. Both sides of politics are doing their best to make it harder for whistleblowers across all walks of life. The current mass surveillance scheme supported by the Coalition and the Labor Party in many ways ingrains the idea that “dobbing” is worse for the “dobber” than the individual or organisation accused of wrongdoing.

Customer voice

Munchenberg and Price were making their call in reference to organisations and how they are creating and fostering the right sort of corporate culture.

According to Munchenberg, part of creating the right culture is about ensuring customers feel they are being treated right and feel “they actually have a voice”.

“Reason being is if you feel with any big institution they have not done the right thing by you straight away, you tend to start off feeling pretty disempowered,” he says. “By shining a light on wrongdoing, by giving a stronger voice to people calling out the behaviours and the conduct that’s not right, that helps drive towards a stronger organisational culture.

“It’s about closing the gap between what you say you stand for and what you demonstrate you actually stand for.”

Executive director of The Ethics Centre Simon Longstaff told the roundtable that on most of the occasions when things do go wrong it’s not because of “wicked people who have set out in the course of their days to do bad things”.

“A lot of the bad things that happen are done by good people doing bad things and a lot of the good things are done by indifferent people who happen to do it just as a matter of habit,” he says.

For Longstaff part of the problem is organisations often lack the capacity to reflect on their decisions because they often don’t ask “Why do we do this?”

Legacy from past

He says it’s often a legacy from the past because an organisation has always behaved a certain way – “the way we’ve always done things”. They need to promote the idea that individuals can think about an issue and then report it, rather than being immediately dubbed a whistle-blower for having raised an inconsistency.

“Individuals instead need to be praised and supported. They need to be told: ‘This is fantastic, you just provided us with a vital piece of intelligence’.”

KPMG’s Fisk says it is important to change the culture that “if you’re calling out a problem, you are very much swimming against the tide, and so the organisation and culture will resist that strongly”.

Yet according to the ABA’s Munchenberg, one of the scarier things for a senior executive is when it’s something they don’t know about. What should be driving internal escalation is knowing everything and that means teaching people to raise issues of wrongdoing.

For ASIC’s Price, the words of Australia’s Chief of Army Lieutenant General David Morrison during the investigation into bullying and harassment in the defence forces resonate most on the whistleblowing front: “The standard you walk past is the standard you accept. That goes for all of us, but especially those who, by their rank, have a leadership role.”