Boardroom Briefing July 2019
Everything you know about your company’s whistleblower protocols will now need a rethink and overhaul. A strengthened and expanded regime comes into effect this year from 1 July for corporate, financial and credit sectors with protections extended to a broader class of people and a greater variety of disclosures.
Existing protections for the reporting of corruption, fraud, tax evasion, and misconduct have been amended- so don’t rely on the company’s old protocol - and this means there is a:
- Widening of the category of whistleblowers eligible for protection to cover an employee or officer, ex-employee or ex-officer, those supplying goods and services (paid and unpaid), an associate and a spouse, child or dependent of these categories.
- Allowing for and protection of anonymous disclosures.
- Narrowing of the category of people whistleblowers can report to, being senior managers and officers, or externally to ASIC and APRA.
- Expanding the types of wrongdoing whistleblowers can make disclosures about although there is now a carve-out for disclosures about “personal work-related grievances” which will be dealt with under current employment laws.
- Replacing the existing good faith test, with that the whistleblower has “reasonable grounds” to suspect misconduct, breaches of legislation, danger to the public or financial system or a “systemic issue”.
- Easing of the way for whistleblowers to be compensated for victimization, such as harassment or dismissal.
- Necessitating that public and large proprietary companies have a policy in place from 1 January 2020, with criminal penalties for non-compliance.
- Providing for “public interest disclosures” to parliament and journalists based on a broad public interest test.
- Increasing penalties for both individuals and companies around confidentiality breaches and non-victimization protections.
In brief: Our Lockton broker can help you manage the potential for:
- More notifiable circumstances under your Professional and Financial Risks policies, so that your whistleblower protocol should be linked to your Professional and Financial Risks protocol.
- Heightened insurer expectations around comprehensive protocols and processes for identification, escalation, assessment, investigation, and reporting of concerns.
- Increased exposure of the company to larger fines and penalties.
- Increased exposure to the reputational damage of the company.
- More claims against the company and its directors and officers.
- More ASIC, and other regulatory authorities, actions against the company particularly in our post-Royal Commission environment with ASIC’s new “why not litigate?” approach.
Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019 (Cth)