… move can avert future costly financial sector cleanup scenario
Auditing Firm, KPMG, is making a case for the establishment of a whistleblowing department to be made mandatory before regulators give out new or renew the licenses of companies.
According to KPMG, the move is critical to ensure the sustainability of other sectors of the economy after the country’s bitter financial sector cleanup which cost the state some GHȼ20 billion.
Speaking in an interview with the B&FT, Partner and the Head of Advisory at KPMG Ghana, Andy Akoto said the department can help halt another sectorial cleanup and must be taken seriously.
“We strongly believe that, if the Bank of Ghana, which has moved very rapidly to issue corporate governance directive, the Securities and Exchange Commission and the Ghana Stock Exchange will for example, insist that their institution go the extra mile to put in place whistleblowing and ethics lines before the issuance or renewing of licenses, we will be on our way to strengthening our business and corporate culture and sustaining our institutions,” Mr. Akoto said.
He added that the nation must learn from the huge investments that it contributed for the financial sector cleanup and ensure other sectors of the economy do not go through a similar ordeal which will necessitate a government bailout.
“We [KPMG] played some part in the resolution of the weak banks. When we went in there, what we saw was very appalling. We saw nepotism, we saw favoritism, we saw downright corruption and malfeasance which could have been averted, if staff had channels they could independently have brought some of these matters out.
Even if not to the respective institutions themselves, they could have had recourse to, for example, report to the central bank itself or even the Attorney Generals office or even third parties like the KPMG to be able to air some of theses issues or wrong doing in order to help save these bank. As it were, they didn’t have,” he said.
He is however shocked that after the many months after the cleanup, there is little talk about a whistleblowing department where critical unethical happenings can be reported. “My surprise is that still this is playing out in a number of institutions. There is nothing like whistleblowing policy or codes of conduct that empowers and enjoins all staff in the organization to be ethical and uphold integrity.”
A maiden whistleblowing survey report by KPMG 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.