February 17, 2012 00:00 By Peter David Hamilton 7,951 Viewed
There is a widely held belief among business leaders in Thailand that whistle-blowing can never be successful here due to deeply held cultural issues that mitigate against one person speaking out against another for fear of being chastised or being wrong.
While one cannot completely overlook or discredit this view, the reality is a very long way from the perception.
There are already many whistle-blowing services being provided in Thailand and our experience shows that under the right circumstances whistle-blowing success rates in Thailand are no different than anywhere else, regardless of cultural issues and perceptions.
International bodies, such as the Association of Certified Fraud Examiners, regularly publish statistics showing how fraud and corruption is detected in organisations all over the world. The ACFE surveys suggest that three times as many acts of fraud were detected by whistle-blowing as any other method. Overall, whistle-blowing is responsible for 40 per cent or more of all reported fraud. The next highest method for detecting fraud is by accident, which is not a strategy that any business leader should consider as being preferable. Whistle-blowing services can and often are opened up to customers, vendors and suppliers and this group is responsible for more than one third of all reports. This shows that just relying on your employees to report fraud and other misconduct to you is going to miss a large potential pool of intelligence.
Many countries have implemented requirements or recommendations regarding whistle-blowing for corporations and government organisations. Included in this is the Dodd-Frank Act in the US which has introduced cash rewards for a whistle-blower who reports to the Securities and Exchange Commission information that leads to the successful prosecution of securities law violations. Since 2002 the Sarbannes-Oxley Act (US) has required all public companies to implement their own whistle-blowing arrangements.
Singapore has also released a Code of Good Corporate Governance which in part recommends that corporations implement independent and confidential whistle-blowing services for their employees to report matters of concern.
Many other countries in Asia are working on regulations and codes for specific industry sectors or for the entire corporate community for whistle-blowing.
In November 2010 the Thai government hosted the 14th International Anti-Corruption conference. The conference resulted in the ratification of the United Nations Convention Against Corruption (UNCAC). Article 8/4, 32 and 33 of UNCAC requires that state parties should establish systems and processes to facilitate the reporting by officials of acts of corruption to appropriate officials which come to their attention during the performance of their engagement.
Anonymous whistle-blowing mechanisms, however, have equal application in the public and private sector because fraud and corruption exists wherever people exist. The mechanism can also be extended to cover issues other than fraud, such as workplace safety. The further advantage is that statistical information from reports can assist management in decision-making.
There are some key factors in the implementing of a successful whistle-blowing programme, and they are as follows:
_ Policy: A clearly worded policy of intent and application.
_ Coverage: Who are the key stakeholders – such as staff, vendors, customers etc?
_ Independence: The service must be external to the organisation.
_ Confidential: Whistle-blowers need to be able to report without fear of reprisal.
_ Protection: At all levels, the organisation needs to do all it can to protect legitimate whistle-blowers
_ Process: The process must be understood by all who are covered by it.
_ Awareness: All stakeholders must be aware of the programme and its purpose.
_ Ongoing: This is not a once-only issue; it has to be reinforced on a regular basis.
_ Follow up: Not acting on a disclosure is the quickest way to guarantee failure.
To conclude, any belief that whistle-blowing doesn’t work in Thailand is quite erroneous and it is dangerous to believe it any longer. It is here already and it does work. A properly implemented and socialised whistle-blowing mechanism can, does and will work in Thailand, as it does everywhere else. Cultural issues are of lesser importance where confidentiality and anonymity can be guaranteed. Any organisation that does not yet have an appropriate whistle-blowing service is leaving itself open to public disclosure of matters it would rather keep confidential, just the same as the whistle-blower does.
Peter David Hamilton is an associate director, Financial Advisory Services, at Deloitte Touche Tohmatsu Jaiyos.