Whistleblower policies allow individuals to report illegal or unethical practices without risking their career. While no federal law specifically requires not-for-profits to have a whistleblower policy in place, several states do and the IRS Form 990 asks nonprofits to state whether they have adopted a whistleblower policy. Having this policy will allow your team to learn about problems before the media, law enforcement or regulators and will send a strong message to your stakeholders that you are committed to good governance and ethical behavior.
Developing Your Whistleblower Policy
Your whistleblower policy should be tailored to your organization. Here are some items to consider when developing your policy:
Covered individuals. Spell out who is covered. In addition to employees, volunteers and board members, you might want to include clients and third parties who conduct business with your organization, such as vendors and independent contractors.
Covered wrongdoing. Financial misdeeds often get the most attention, but whistleblower policies should have a longer reach. For example, you might include violations of organizational client protection policies, conflicts of interest and discrimination.
Reporting procedures. Explain reporting procedures. Must claims be made to a compliance officer or can they be reported anonymously? Is a confidential hotline available?
Investigative procedures. Covered individuals need to know how you’ll handle reports once they’re submitted. State that every report will be promptly and thoroughly investigated and that designated investigators will have adequate independence to conduct an objective query. Also describe what will happen after the investigation is complete. For example, will the reporting individual receive feedback? Will the individual responsible for the illegal or unethical behavior be punished?
Confidentiality. A promise of confidentiality can make whistleblowing more appealing. But confidentiality may not be possible if whistleblowers need to become witnesses in criminal or civil proceedings.
Disciplinary action. Not every whistleblower is motivated by pure intentions. State that your organization will take disciplinary action against individuals who make unfounded allegations that are reckless, malicious or intentionally false.
Be sure to distribute your policy widely by incorporating it into your employee handbook and employee orientation program, and by presenting it to board members and managers. For more information, contact us.