Pressing need for whistleblowing channels in Asia


In light of recent global regulatory trends, the author of this article believes there is a pressing need for Asia-based corporations to develop internal whistleblowing channels and concomitant policies and procedures. Few Asia-based companies – even those with global operations – have whistleblowing policies, and those that do rarely publicise them.

DD1Effective internal whistleblowing channels strengthen corporate governance in general, and mitigate the risks of regulatory and legal proceedings. The latter is particularly important in the current regulatory climate. If, as anticipated, regulatory agencies in Asia start to follow global trends to incentivise and protect whistleblowing by offering bounties in order to secure penalties for alleged corporate misconduct, having a robust and defensible internal whistleblowing programme will go a long way towards mitigating the corresponding legal, financial and reputational risks.

Learning about misconduct early is critical towards meeting the fundamental objectives of prevention, detection and remediation in any successful compliance programme. From a regulatory risk perspective, it is clearly preferable for employees to raise concerns of misconduct and compliance breaches internally in the first instance, rather than make reports to regulatory or law enforcement agencies. This allows the company to promptly investigate and take remedial action before assessing whether it should make a self-disclosure to the relevant regulatory or law enforcement agency. The value of the ability to exercise control over the flow of potentially damaging information, and to mitigate its impact upon the company, cannot be overstated.

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Mark Johnson is a litigation partner at Debevoise & Plimpton in Hong Kong