Amendments to the whistle-blower regime indicate a move towards creating a regime that will protect those who speak out about wrong-doing. But what do organisations need to do to change?
For Dennis Gentilin, Founder of Human Advisory Systems, the key is in organisational culture.
The GRC Professional got a chance to catch up with Gentilin earlier this week to talk a little about ethical culture and the role of the whistle-blower.
A whistle-blower himself, what is unique about Gentilin’s case is that he ended up working at his employer, the National Australia Bank (NAB), for another 12 years, following the event.
“Given some of the stories you hear these days, especially the ones that can’t retain their anonymity, it’s a fairly unique story,” said Gentilin. “I did my best to put the whole scenario behind me—which, I think, most survivors want to do. They want to get on with their career. No one joins an organisation to become a whistle-blower. But it does sort of shape you in some way.”
In Gentilin’s case, it drove his interest in human and organisational behaviour.
According to Gentilin, at the time of the FX incident, NAB did not have a formal whistleblowing policy but instead was in the process of developing one.
Contrary to the media’s emphasis on the ‘lone wolf’ whistle-blower, Gentilin’s scenario included a variety of people, all of whom had different experiences and thus benefited a lot from each other’s support.
“What helped me was that there was a group people within the financial markets function who understood what I’d been through and how difficult the situation was. They really rallied behind me, instead of seeing me as ‘used goods’ or someone to throw on scrap heap. They saw the potential in me and provided me with opportunities, and I think, ultimately, that’s what kept me at the bank for that extended period of time,” Gentilin explained.
Organisational culture and ethical leadership
Gentilin became interested in some of the research in that area and this led him back to school, where he studied psychology, eventually publishing his text, The Origin of Ethical Failures.
“The book is not about NAB or the incident per se, but it more takes the research from the behavioural sciences and explains why ethical failures do and will continue to happen within any organisation,” Gentilin explained, adding that he has been following the Royal Commission very closely.
“One of the things I try to get across in my book is that, traditionally, the way we have tried to get across these issues is by dragging more rules and more regulation and more policies into it,” he said. “I am not suggesting that this is not important or that it has no role to play, but too-heavy a focus on that, without understanding the cultural underpinnings of ethical failures, means you can actually fail to address the underlying issues.”
The fact culture cannot be legislated is something ASIC has acknowledged, instead focussing on the ‘tone from the top’ angle, making senior leaders and the board responsible for wrong-doing in their organisation.
The Banking Executive Accountability (BEAR) is another example of how regulators will ensure leaders are held responsible for what is happening within their respective organisations.
Gentilin stressed the importance of culture, noting its connection to ethical leadership. He then shared his ‘ingredients list’ for the ideal ethical culture of an organisation.
Ingredients for a good culture:
Ethical Leadership: Leaders across the organisation act as role models for the core values and principles
Organisational Justice: When things go wrong, people are held accountable—regardless of their status.
People Prepared to Speak Up: And when they do speak up, they actually see some results.
Thoughts on the reward system
Gentilin is not a huge fan of the US-style rewards system, stating that this has to do with the risk of a lot of claims being made without merit.
“Many people see it as an opportunity to make a lot of money, and they will almost create issues in order to hit the jackpot, so to speak.”
He would prefer to see some sort of safety net and, in fact, this was mentioned in the report commissioned by the Parliamentary Inquiry—that is, the creation of a whistleblowing authority that would be given the ability to replace someone’s salary.
“I’m a proponent for that kind of compensation—where there is a safety net there that protects the individual if they do experience retaliation,” Gentilin explained.
What would a ‘good culture for speaking up’ look like?
“This is where I make a distinction between formal and informal mechanisms,” Gentilin explained. “The formal mechanisms are things like your whistle-blower hotlines, and the process the investigation takes to ensure it is robust and that it protects the anonymity of the whistle-blower, just to name a few things. The informal mechanisms include questions such as: ‘has the organisation created an environment where people feel comfortable raising concerns?’, and when they do raise concerns, ‘are they listened to, are they respected, and are they taken seriously?’.”
From an individual perspective, the questions to consider include: ‘who you are going to speak to?’, ‘how are you going to approach it?’, ‘are you going to do it by yourself?’ and ‘what sort of pushback are you going to get?’…not to mention the importance of documenting the process.
“All these kinds of things help the person raising the concerns to get the outcome they want,” Gentilin said. “I reflect on my experience and I can assure you that I could have done things a lot better.”
For risk and compliance
Gentilin said that risk and compliance professionals need to find a reliable way to measure the culture in their organisations, mixing surveys with other methodologies, such as gathering stories from within the organisation.
This also means trying to establish a baseline in organisations with multiple cultures. Only after this is established can there be consideration into the changes that need to be made.
“It is really a matter of executives and boards getting comfortable with these issues and recognising that, in any organisation, if you measure and create a proper baseline, you will always find issues and you must be prepared to face what you find in order to make the necessary changes.”