Q&A: Whistleblower protections and reporting mechanisms

February 2025  |  SPECIAL REPORT: CORPORATE FRAUD & CORRUPTION

Financier Worldwide Magazine

February 2025 Issue

FW discusses whistleblower protections and reporting mechanisms with Pavel Petrov at Novartis.

FW: What trends do you believe have dominated the corporate whistleblowing landscape in recent years? To what extent has there been an uptick in the number of employees blowing the whistle?

Petrov: Post-pandemic, most companies saw an increase in the number of whistleblowing reports. Various factors have come into play, such as an increased awareness of and support for people exposing potential wrongdoing, higher rewards given by authorities for tips, new pieces of legislation such as the EU Whistleblowing Directive and expanded legal protections for whistleblowers in many jurisdictions. Also, advances in technology have facilitated the creation of user-friendlier, more secure and anonymous reporting platforms. Whistleblower hotlines, encrypted messaging apps and online platforms have supported easier and safer reporting of misconduct.

FW: Are there any common factors driving whistleblower reports? Could you highlight some of the common themes?

Petrov: Several factors are driving whistleblowing reports. Increasing awareness and access to information and social media have made it easier for people to gain courage and identify channels to speak up. The introduction of whistleblower protection laws and financial incentives, such as reward programmes, have incentivised individuals to report misconduct and raised their confidence to report. We observe shifting societal attitudes that look much more favourably at those exposing corporate misconduct. There is also an increasing emphasis on transparency, accountability and ethical behaviour from corporations. Many whistleblowers are driven by a sense of moral duty to bring positive change to their organisation. Themes may vary depending on the industry and geographical location of a company but some of the common themes are fraud, regulatory compliance specific to the respective industry, and workplace interpersonal issues such as harassment, bullying, retaliation, corruption and conflicts of interest.

FW: How important is it for companies to create a culture that encourages and safeguards individuals who blow the whistle to authorities, either internally or externally? What legal obligations might companies need to meet?

Petrov: Creating a speak-up culture that encourages and protects individuals who speak up is of critical importance for companies, and it is a key element of a successful compliance programme. Such a culture not only promotes ethical behaviour but also helps in early detection and prevention of misconduct, ultimately safeguarding the company’s reputation. Legally, companies may have various obligations depending on the jurisdiction in which they operate or conduct investigations. Some countries have specific laws, such as the EU Whistleblowing Directive or US Department of Justice guidelines, which grant protections and incentives to whistleblowers reporting certain type of violations. Companies may also need to comply with industry-specific regulations related to whistleblowing. Investigations stemming from whistleblower reports must be conducted in compliance with applicable laws and regulations, with evidence appropriately preserved. Depending on the severity of the allegations, reporting the matter to external authorities or regulatory bodies may sometimes be necessary. A strong emphasis on non-retaliation should be embedded in a company’s code of conduct or even in a standalone non-retaliation policy which clearly states zero tolerance for retaliation and protection for those who speak up in good faith. Overall, companies should proactively establish a supportive culture, encourage reporting, and meet their legal obligations to protect whistleblowers and address misconduct effectively.

“Advances in technology have facilitated the creation of user-friendlier, more secure and anonymous reporting platforms.”
— Pavel Petrov

FW: What advice would you give to companies in terms of implementing an effective whistleblower programme? What are the essential components?

Petrov: A successful internal corporate whistleblower programme comprises several key components. It should have a well-defined and easily accessible reporting mechanism, with multiple channels such as web, phone and email to allow anonymous reporting and reporting in a local language. This ensures that employees feel safe and protected when reporting misconduct. A robust policy and procedure should be in place to handle whistleblower reports effectively. This includes clearly outlining the process of receiving, reviewing and investigating reports, as well as ensuring protection against retaliation for whistleblowers. Properly training employees on the whistleblower programme is crucial. It helps them understand their rights and responsibilities and encourages a culture of reporting misconduct. Regular communication and awareness campaigns about the programme are also vital. This shows the company’s commitment to addressing wrongdoing and encourages employees to come forward with information. This programme should not only address the individuals who have the courage to speak up but should also train managers to be ready to listen when employees approach them on sensitive matters. Very often the immediate manager is the first person to whom a complaint is raised, so it is critical that the manager is trained and responds appropriately. Managers need to be trained to listen and create a safe space for team members who raise concerns. Furthermore, a prompt and thorough investigation process is essential. This involves designating trained personnel to handle investigations, gathering evidence and taking appropriate remedial action based on the investigation’s findings. Lastly, we should not forget to close the loop with the initial complainant, update and thank them for speaking up upon completion.

FW: If a company does receive a whistleblower report, how should companies respond in preparation to conduct an internal investigation?

Petrov: To efficiently respond to a whistleblower report, and assuming the company already has a comprehensive policy in place, it is essential to establish rapport with the complainant and gather all relevant details. First, promptly acknowledge the complaint. I would recommend doing this within two to three workings days. It is also crucial to inform the person under investigation. The initial information obtained from the complainant is very important to appropriately address the complaint’s risk level and triage to the most suitable investigator, including compliance, human resources and legal when an investigation needs to be carried out under legal privilege or corporate security. Before commencing an investigation, the team must clarify the specific allegations, identify applicable policies and regulations that may have been violated, determine the accused party, and outline the types of evidence to be collected, such as testimonials and documentary. This will ensure a focused and efficient investigative process.

FW: What steps can companies take to manage external perceptions, including media scrutiny, in the event that a whistleblower complaint and subsequent investigation become public?

Petrov: The corporate communications team and the function dealing with whistleblower complaints should collaborate closely throughout the entire process to ensure internal commitment, an understanding of the process and the management of potential reputational risks. Communications strategies, along with a speak-up policy framework, foster a culture of high ethical standards, integrity and transparency. Companies need to be prepared to handle reputational risks and meet their legal obligations to protect whistleblowers and address misconduct effectively, which includes all communications. This means having robust crisis and issues communications protocols in place to help build strong collaboration between the crisis communications team, the investigative team and the legal function. The communications response should be centrally managed to ensure speed in creating statements and responses when needed, as well as consistency across the geographies where news of the investigation spreads. When responding, it is important to be truthful and not ‘piecemeal the truth’ as pressure on the company increases. Employees reporting misconduct or assisting in an investigation must be protected from retaliation and media scrutiny.

FW: Looking ahead, what are your predictions for how the whistleblowing landscape is likely to evolve? Do companies need to review and improve their whistleblower programmes with an eye on ethics, culture and conduct?

Petrov: I expect the landscape will continue to evolve rapidly. Companies must remain vigilant and constantly scan the external and internal environment and make improvements to their whistleblowing and investigations policies, programme and platforms. Trends will continue toward enhancing legal protections for whistleblowers, increased incentives and stricter penalties for retaliation. I also expect to see increased collaboration and sharing among authorities and organisations tasked with enforcement. Advancement of technology such as AI will have a significant impact. This will open great opportunities for improving the efficiency and effectiveness of whistleblower and investigation programmes, such as identifying trends, issues and relevant evidence within large amounts of data. Emphasis on building a strong ethical culture will be even more critical for companies, including fostering open communication, encouraging reporting and establishing a sense of accountability to prevent misconduct before it occurs.

 

Pavel Petrov is global head of the SpeakUp office at Novartis. The SpeakUp Office oversees the reporting and subsequent investigation of complaints concerning possible instances of misconduct within the company. These complaints may involve infringements of the code of ethics, relevant company policies, as well as local laws and regulations. Mr Petrov joined Novartis in 2005 and has progressively assumed positions of greater accountability within the finance, internal audit, and ethics, risk and compliance departments. He can be contacted on +41 (61) 529 2954 or by email: pavel.petrov@novartis.com.

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THE RESPONDENT

Pavel Petrov

Novartis

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