Maintaining a strong whistleblower policy is a good business decision. It also helps associations address issues before they snowball and ensures organizations act in a way that is consistent with their values.
While talk of whistleblowers these days is centered on the White House, the news should also serve as a reminder for associations about why having a sound whistleblower policy in place is a good business practice.
“The most important benefit of having a whistleblower policy is it is a tool for surfacing concerns about illegal or unethical behavior,” said Melanie Lockwood Herman, executive director and CEO of the Nonprofit Risk Management Center. “Leaders want to make sure their organizations are acting in a manner consistent with the values of their organization.”
Ever since the Form 990 began asking nonprofits in 2008 whether they had instituted a whistleblower policy, more organizations have adopted one. According to Benchmarking in Association Management: 2018–2019 Policies and Procedures, Vol. 2, 79.5 percent of associations currently have whistleblower policies.
According to Herman, whistleblower policies should include four core elements:
- encouragement to report
- procedures for reporting
- an explanation of how the association will respond
- a promise that no retaliation will occur
“The core message they need to have is, if you believe there might be illegal or unethical behavior, we want you to step forward, and we want you to tell us those concerns,” Herman said. “We are committed to investigation. You won’t get brushed off.”
Retaliation against whistleblowers is against many state and federal laws, and can lead to expensive penalties. Because some employees aren’t aware of the penalties, Herman said it is important to put in writing what will happen after they blow the whistle and offer reassurance to those who might come forward.
Once a policy is in place, an association may worry about complaints coming in. Herman said not to, because many are resolved through investigation. “The employee heard a colleague boasting about a lavish meal he had,” Herman said as an example. “She jumped to the conclusion that someone was misusing the organization’s funds. But when it was investigated, it was determined he used his personal funds to pay for that meal.”
Even though many complaints will be resolved without unethical or illegal behavior being uncovered, Herman said associations should still investigate any whistleblower complaints they receive. “It’s naïve to think that you adopt a policy and no reports will be made,” she said. “Ultimately addressing those complaints will make the organization stronger and more effective in the long run. We all want our organizations to reflect the values that we embrace.”
Herman added that complaints can act “as a radar system or early alert system, so they can address trouble in a timely manner, before it snowballs.”
While having a whistleblower policy allows employees to feel protected when they report misconduct, Herman recommends an additional approach for associations hoping to surface problems and deal with them before they get out of hand.
“A better tool to really elicit concerns that individuals may have in the workplace is creating an environment that is psychologically safe,” Herman said. “In that environment, people speak up. You can’t change culture by issuing a decree. The way to convey there is safety is to treat people who speak up with kindness and empathy—and not shame someone who speaks up.”