Transparency, communication can improve company compliance


In order to improve the internal whistleblowing process, companies must foster transparency and communication in the workplace and ensure employees feel comfortable raise compliance concerns, according to a panel of compliance officials.

In the age of Dodd-Frank companies are increasing looking to handle compliance issues internally, before they reach the Federal government and the SEC's recently launched Office of the Whistleblower. But many employees don't feel safe whistleblowing at their company, fearing retaliation by their superiors.

"The first step to obtaining a true culture where compliance and ethics can be cultivated is for each company to stop this type of legal warfare," said Stephen Kohn, Executive Director of the National Whistleblower Center.

Speaking on a panel the 2012 Dow Jones Compliance Symposium in Washington, D.C., Kohn noted that companies work from the top-down to eliminate the negative stereotypes associated with whistleblowers.

 "Without that type or of commitment at the highest levels, compliance programs will not be effective," he said.

But, it's important to note that whistleblowers have had protection for years and years, through legislation such as Sarbanes-Oxley and Dodd-Frank. Part of the new whistleblower provisions even permit submitting anonymous tips. Employees, however, should not be faulted for voicing compliance concerns – however true -- with their supervisors

"It's so important to train supervisors," said Sarah Brochard, a partner at Philadelphia-based lawfirm Morgan, Lewis & Bockius.

She noted that often times managers are not communicating well with their employees and this incomplete information can lead to misunderstandings or good faith suspicions of compliance wrongdoings that may turn out to be untrue.

"If there is a better, robust dialogue, the employee may not even perceive that there is, in fact, a problem," she said.

If communication is improved, employees start to feel confident that action is being taken against compliance issues and will feel more comfortable raising issues, increasing the chance for companies to investigate compliance issues internally, before they reach Federal levels. The panelists also agreed that other methods, such as offering rewards for good behavior inside the company, may not be effective ways of encouraging compliance.

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