59% of companies do not have whistleblowing facilities – KPMG Report

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A maiden whistleblowing survey report by auditing firm KPMG has revealed that many public and private companies give little or no importance to setting up whistleblowing facilities to aid the company receive complaints of unethical activities among staff and management.

According to the report, 59 percent of respondents said there was no whistleblowing hotline in their organisation. Out of this, the public sector accounted for 13 percent of organisations without whistleblowing hotlines.

The report noted that 66 percent of the respondents without whistleblowing hotlines have observed unethical behaviors, with only 37 percent reporting the issue to the necessary authorities. Lack of trust and the perception that there will be no action are some of the reasons many employees cited for not reporting unethical activities. The report added that other employees were afraid of victimisation.

The survey also revealed that the top issues not reported are nepotism, favouritism, discrimination and misappropriation of assets. It noted that even though issues like nepotism and discrimination do not necessarily constitute fraud, they can facilitate such and have adverse effects on staff morale and the company’s reputation.

The KPMG report, which saw the interviewing of management and staff in almost all sectors of the economy – including construction and real estate, NGOs, communication and media – sought to understand the use of whistleblowing facilities and how management and staff perceive the tool, for improvement of governance, transparency and accountability. It is to also help organisations understand the whistleblowing culture in the country, and why most employees do not blow the whistle.

Speaking in an interview with the B&FT, Partner and the Head of Advisory at KPMG Ghana, Andy Akoto, said the findings call for an amendment of the current Whistleblowers law, Act 720, 2006 to make it address some gaps.

He added that it was a big surprise to realise that many companies did not know of their ability to set up whistleblowing facilities, which would go a long way to improve their bottom-line and enhance their corporate governance systems.

“A lot of people were not even aware that there could be something like this to improve their governance and control systems; this is for the simple reason that their institutions do not have it. If you go around most firms in Ghana, you will be surprised to find out that a lot of them do not have it. Either the executives and management are not aware, or if they are aware they are not interested for obvious reasons. Therefore, access to whistleblowing channels was a challenge,” Mr. Akoto said.

He added that past developments have proven the mere existence of a Whistleblowing law which empowers the Attorney Generals Department and Commission on Human Rights and Administrative Justice (CHRAG) to prepare and prosecute cases reported is not enough; therefore, corporate firms must set up facilities to engender transparency, good governance and accountability.

The report recommended that it is essential for institutions to set up whistleblowing hotlines for employees and external parties outside the organisation, to enhance control systems and to facilitate reporting of unethical issues.

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