ASIC Report 827 On Whistleblowing Practices Of 134 Surveyed Companies: How Does Your Company Stack Up?

Disclosure rates

Almost one quarter of companies reported receiving zero whistleblower disclosures.

Among the companies surveyed, the median disclosure rate was around 0.22, with 30 of the 134 companies surveyed reporting that they had received zero disclosures during the relevant period.Of those companies:

• 17 had between 0 and 999 employees;
• 7 had between 1000 and 2499 employees;
• 4 had between 2500 and 4999 employees; and
• 2 had 5000 or more employees.

ASIC considered this median disclosure rate to be on the lower end compared to international benchmarks.

13 of the 134 companies surveyed accounted for almost 74% of all whistleblower disclosures reported, and there was significant variance in disclosure rates between industries. That may be driven by the particular risk factors that exist within particular industries.

Around 39% of the 8,095 disclosures reported qualified for protection under the Corporations Act 2001 (Cth) ("in-scope" disclosures).

Disclosure channels

Dedicated webpages and hotlines were the most popular disclosure channels, representing 69% of all reported disclosures.

Among the surveyed companies, the most common channel through which whistleblower disclosures were made was through a dedicated whistleblower reporting webpage (50%), followed by a dedicated whistleblower hotline (19%), direct discussions with managers/eligible recipients (11%), and dedicated whistleblower email addresses (10%).

Surveyed companies that offered dedicated webpages and hotlines had a higher median disclosure rate than surveyed companies that did not.

Over half of in-scope whistleblower disclosures were made anonymously.

Substantiation of whistleblower disclosures

Almost one quarter of in-scope disclosures were substantiated.

On average, around 24% of in-scope disclosures investigated by the surveyed companies were ultimately substantiated, with large companies (over 1000 employees) substantiating a larger proportion of in-scope disclosures than smaller companies.

Use of third-party services

The majority of companies surveyed engaged third-party service providers as eligible recipients for whistleblower disclosures, and almost one third outsourced at least part of their investigations of whistleblower disclosures to third parties.

Around 82% of companies engaged a third-party service provider as an eligible recipient, with large companies more likely to do so than smaller companies. Moreover, companies that engaged a third-party service provider as an eligible recipient generally had higher disclosure rates than those that did not.

31% of companies surveyed reported outsourcing their whistleblower investigations to third parties. There were no significant differences in substantiation rates for companies that outsourced investigations compared with those that did not.

Time to complete investigations

Companies surveyed took an average of 49 days to complete whistleblower investigations.

Generally, the less time a company took to complete an investigation, the lower its substantiation rates were. Companies that outsourced their investigations to third parties took longer on average to complete investigations than those that did not (62 days compared to 40 days).

Outcomes of substantiated disclosures

Very few disclosures were ultimately referred to a regulator or law enforcement agency.

Surveyed companies' most common response to a substantiated disclosure was disciplinary action against staff member(s) (42%) or staff education / training (24%). Only 11 of the surveyed companies ultimately referred a disclosure to a regulator or law enforcement agency, comprising:

• 3 from the mining sector;
• 3 from the financial and insurance services sector;
• 2 from the electricity, gas, water and waste services sector;
• 1 from the manufacturing sector;
• 1 from the construction sector; and
• 1 from the arts and recreation services sector.

None of the surveyed companies in the healthcare and social assistance industry referred a disclosure to a regulator or law enforcement agency.

Information and training

Companies that provided regular information and training on their whistleblower program to employees had higher disclosure rates compared to those that provided training only on commencement, or that did not provide any training.

Larger companies were more likely to periodically circulate information about their whistleblower programs, and to offer recurring training on the same.

Assessment and reporting

70% of companies surveyed reported reviewing the effectiveness of their whistleblowing programs.

Larger companies were more likely to conduct reviews and to seek feedback from their employees than smaller companies. The majority of companies (81%) had in place a set frequency for reporting on their whistleblower program to senior management or a governance committee, with large companies being more likely to do so than smaller companies.

Whistleblower protection and support

The majority of companiessurveyed reported having:

awhistleblower protection officer (86%) and offered access to< strong>employee support services (87%), access to leave (66%) and modifications to work duties or role responsibilities (64%).