Why You Should Engage an Independent External Whistleblower Service Provider

20 February 2020

Our previous articles have described the protections that companies and constitutional corporations are required to provide under the Corporations Act 2001 (Cth) (Corporations Act) to whistleblowers whose disclosures qualify for protection, and the serious civil and criminal penalties that they may face if they fail to do so. Broadly speaking, these whistleblowers must have the confidentiality of their identity protected and they must be protected from detriment.

Schools should consider carefully before concluding that they have the expertise to manage whistleblower disclosures internally. The following questions may assist in assessing the risks:

  • Are there staff members in your school who have the knowledge and experience needed to take all reasonable steps to reduce the risk that the confidentiality of a whilstleblower’s identity will be compromised? For example, do your staff know how to keep a whistleblower’s identity completely confidential, while also providing all the necessary information to an investigator who is charged with investigating the disclosure?
  • Do you have the capacity to manage a disclosure from a whistleblower who wishes to remain anonymous while also receiving updates on the progress of the investigation of their disclosure?
  • Do your staff know when, to whom and how a whistleblower’s identity may be disclosed without breaching the Corporations Act protections?
  • If one of the staff you have designated as an Eligible Recipient receives a whistleblower disclosure in the middle of a busy day, do they know how to obtain as much information as possible from the whistleblower, while also providing the whistleblower with assurance that they are being taken seriously? This is particularly important if a whistleblower wishes to be anonymous and is reluctant to be contacted if the investigator needs more information to support a thorough investigation.
  • Do your Eligible Recipients know how to assess the risks that the whistleblower will be identified and experience retaliation, and to discuss those risks with the whistleblower?

In its Regulatory Guide 270 Whistleblower policies, the Australian Securities and Investments Commission (ASIC) includes, as one of its good practice tips, the suggestion that entities consider authorising an independent external whistleblower service provider as an Eligible Recipient to directly receive disclosures, where it is financially viable for them to do so. A service provider may provide greater confidence to employee whistleblowers, including confidence in the service provider’s objectivity. A service provider is also likely to offer better access for external disclosers, such as suppliers. Through an independent external whistleblower service, a whistleblower can:

  • make a disclosure anonymously and outside business hours
  • retain their anonymity while being kept informed of the status of their disclosure
  • provide any further information needed for a thorough investigation without compromising the confidentiality of their identity.

It is acknowledged that there is a financial cost to engaging a whistleblower service provider. Any decision not to engage one should take into account the financial and reputational costs that could arise from failing to manage a whistleblower disclosure with the utmost sensitivity, discretion and objectivity and in accordance with the requirements of the Corporations Act.

Schools that take pride in having robust, widely-publicised programs for child protection, fraud and corruption control and complaints handling may believe that they have little to fear from a whistleblower disclosure. It would be easy to underestimate the complexity of investigating a disclosure while offering all the mandatory protections to the whistleblower, particularly if the disclosure involves allegations of historic misconduct.

More Information

Visit this CompliSpace Whistleblower Resources Page to access more resources including a webinar recording and links to other School Governance articles. 

Helen Juillerat

Helen is a Legal Research Consultant at CompliSpace. She completed a Bachelor of Laws degree at the University of Queensland and has worked in legal publishing and in roles in the public higher education and health sectors focusing on governance, policy and compliance.