You are here
More may be prepared to speak up on corporate malfeasance
IN Singapore, where whistleblowing is not a culture and faith in management is sometimes tested, hardcoding the whistleblowing policy into the Listing Rules gives assurance for more people to come forward to expose fraud and malfeasance.
"Entrenching a comprehensive whistleblowing regime will endow it with the appropriate recognition and legitimacy. Together with the publicity that comes with it, it will give whistleblowers the confidence to come forward with their concerns,'' Hamidul Haq, Partner, Commercial Litigation at Rajah & Tann Singapore said.
He added that many international companies operating in Singapore and established local companies already have comprehensive whistle-blowing regimes.
Companies should view whistleblowing policies as another framework to safeguard them against misconduct, corporate leaders said.
Liew Mun Leong, chairman of Surbana Jurong and the founding president & CEO of CapitaLand Group (2000-2012), believes that all companies - private or listed - should be encouraged to adopt a whistleblowing policy and protect complainants.
"Whistleblowing policies should be viewed as another framework, in addition to external and internal auditing, for the company to safeguard against any misdeeds or wrongdoing which will harm the company's performance and reputation,'' Mr Liew said.
The Singapore Exchange Regulation (SGX RegCo) is planning to hardcode its whistleblowing policy into its Listing Rules before the end of the year. The policy is currently enshrined in the corporate governance code, which does not have the force of the law.
Mr Liew, who is also Changi Airport Group (CAG) chairman, believes that public-listed companies in Singapore will be convinced to adopt whistleblowing policies and protection of complainants as part of their corporate culture and good governance.
"It may take some time to assume that every company will adopt such a policy,'' he reckoned. Both Surbana Jurong and CAG have adopted whistleblowing policies and complainants protection although they are not publicly listed.
Adrian Chan, Partner and Head of Corporate at Lee & Lee, said whistleblowers are nearly always employees or insiders.
"Having an external regulatory body like the SGX mandate a whistleblowing policy that protects complainants will invariably give more confidence to potential whistleblowers that their identities can be protected and the likelihood of reprisals minimised," Mr Chan said.
Currently, insider-whistleblowers must trust that the separate and distinct whistleblowing policies set up by individual listed companies are managed independently and professionally.
"But trust is sometimes hard won and I will not be surprised that, if left on their own, jaded and disillusioned insiders may not have the confidence to place complete trust in the integrity of their own company's internal whistleblowing process.
"Therefore, imposing an external regulatory framework upon issuers with the Listing Rules sends a strong signal that the authorities wish to preserve and enhance the whistleblowing process as one of the best ways to uncover wrong-doings,'' Mr Chan said.
Having the policy in the Listing Rules also gives companies more compelling reason to do it, David Gerald, president and CEO of the Securities Investors Association (SIAS), said. He noted that employees are generally reluctant to come forward unless they are willing to leave the company or they have the comfort of knowing that they will be protected.
"Usually they resign rather than get involved,'' said Mr Gerald.
"Companies must do everything they can to give the employees the comfort of knowing that there will be no recrimination against them from any source and that their employment will be secure unless it is a mischievous and unfounded complaint. The employees should be advised by the listcos that they can have recourse to SGX and/or Ministry of Manpower (MOM) should they be not protected or persecuted,'' he added.
However, whistleblowing is not an answer to all mismanagement problems, Tham Sai Choy, chairman of the Singapore Institute of Directors (SID), warned.
"Where there is criminal activity being perpetrated by top management, which some employees have knowledge of and are in disagreement with, it is an important tool that we should make available so that whistleblowers can feel safe to step forward.
"Where there is inept but not dishonest management, bad financial results but not hidden, investors could lose a lot of money but it is not a situation where whistleblowers can reduce investor losses,'' he said.
The protection of whistleblowers go beyond framing of policies and procedures, and knowing that Singapore has a strong law abiding culture, with vast majority wanting to support people who are on the right side of law, Mr Tham believes.
"That's the strongest protection that a whistleblowing employee can get,'' he said.
Associate professor Mak Yuen Teen of the National University of Singapore Business School remains unconvinced that more will step forward without a comprehensive whistleblowing protection law.
"I'm afraid employees will still be fearful about whistleblowing if the culture is toxic and the board is collusive. There are many ways that organisations can take reprisal actions. Without a comprehensive whistleblowing protection law, it's not going to work,'' he said.
"If Singapore is serious about whistleblowers, introduce a proper whistleblower protection legislation, which includes protection from civil liability such as defamation suits, for those who do so with reasonable belief,'' he suggested.
However, not all think the fear of litigation has been an impediment to whistleblowing.
"The practical workaround for a whistleblower with any fear of reprisal has been to report the matter anonymously,'' Mr Tham said.