Whistleblowing in Financial Services – still room for improvement
The whistleblowing charity Protect has updated its research on whistleblowing in financial services. Their original research in 2012 – Silence in the City – found a lack of trust and transparency. Protect notes the changes introduced by the financial regulators in 2016 under the Whistleblowing Rules that require firms to have a Senior Manager appointed as whistleblowers’ champion; internal whistleblowing arrangements to handle all types of disclosures; text in settlement agreements explaining workers have a legal right to blow the whistle; information for UK-based employees about the regulator’s whistleblowing services; an annual report on whistleblowing to the board, and to inform the regulator if it loses an employment tribunal with a whistleblower.
The new research – Silence in The City 2 – examines the “lived experience” of 352 finance sector whistleblowers who contacted the Protect Advice Line between January 2017 – December 2019. The analysis reveals both positive and negative changes since 2012On the positive side the research found a 15% increase in the number of whistleblowers raising their concerns about wrongdoing or malpractice internally with their employer. However, a third of Whistleblowers were ignored when they came forward and raised the wrongdoing they had witnessed with that figure rising to 58% of those whistleblowers reporting that they had been victimised. Almost two thirds of whistleblowers had experienced victimisation, including retaliation from managers or co-workers, dismissal or departure.
The report recommends a number of changes. It is not sufficient simply to show compliance with the Whistleblowing Rules. Each employer needs to ensure they review all their arrangements and that they are working well in practice. Employers also need to keep a strong line of communication with each whistleblower all the way through the process, and all directors, managers and HR staff must act on the concern raised and respond to reports of victimisation.
More widely Protect recommends that The Government should bring in a positive duty on employers to prevent victimisation of whistleblowers, ensuring thereby that employers assess and minimise the risks of harm coming to whistleblowers, before victimisation occurs. It also recommends that the FCA and PRA need to react to the tick-box approach many in financial services seem to have adopted regarding the Whistleblowing Rules and hold firms and senior managers to account where there is a credible case that whistleblowers have been victimised.