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Changing Whistleblowing Culture in the Financial Services Sector

It is no secret that in the City whistleblowing has a stigma attached to it. Pre-credit crunch there was a culture of fear surrounding whistleblowing as reported by the Parliamentary Commission on Banking Standards.

The fear that employees have about coming forward to raise concerns about bad practices in the workplace is not altogether unfounded. Recent statistics from Public Concern at Work’s UK Whistleblowing Report have revealed that less than 10% of employees have a positive reaction when they raise a concern about work. 22% of employees were actually victimised as a result of doing so and 33% of employees who raised a concern were dismissed.

It may be the ‘culture of fear’ which explains why only 25% of those raising concerns with the Financial Conduct Authority (FCA)’s whistleblowing line, had raised their concerns with their employer first. In order to try and change that culture, the FCA and PRA (Prudential Regulation Authority) are requiring changes to be made to firm’s whistleblowing procedures and practices, implementing the Banking Standards Commission’s recommendations.

One of these changes is for all firms to create a role of “whistleblower’s champion”. This would be a non-executive director in every firm, preferably the Chairman. The whistleblower’s champion role would be to oversee the effective operation of their firm’s whistleblowing policies, create a report each year and present it to the company’s board of directors. In addition, they would have an obligation to ensure that no-one is victimised as a result of blowing the whistle.

The yearly report could then be requested by either the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) if they wish to check up the company’s whistleblowing practices. The FCA and PRA will also be used to escalate complaints made by whistleblowers when necessary under the new proposals.

Having whistleblower’s champions is a radical idea. By giving the role to one of the most senior individuals in a company, with direct responsibility to the FCA/PRA, one would hope it will start to bring about real change. Not least because of firm’s desire to ensure that individuals are protected and not treated unfairly.

The proposals recommend that anyone connected to a firm, not just current employees, should be able to report their concerns and should be informed of how to do so. Further, whistleblowing procedures should encourage reports not just about unlawful behaviour but about anything that has an adverse effect on a firm’s reputation or finances.

A cultural shift where people do not fear speaking out against wrongdoing they see should certainly be welcomed in the banking and financial industry – it would make scandals like LIBOR and FX rate fixing, a thing of the past. But is the City really capable of being open and transparent – when part of its modus operandi is to be intensely competitive and intolerant of failure?

The expert Employment Solicitors at Slater and Gordon Lawyers UK provide expert legal advice on whistleblowing. For an initial consultation call us on freephone 0800 916 9060 or contact us online.

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