“When whistleblowing works well it helps consumers, markets and firms and keeps everyone safe and that is our aim”. So said Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, commenting on the launch of their ‘In confidence, with confidence’ campaign, which encourages individuals working in financial services to report potential wrongdoing to the FCA.
After a damning report in December on the handling of the Connaught affair by the FCA’s predecessor, the Financial Services Authority (FSA), the FCA has overhauled the safeguards it offers to those providing sensitive information, bolstering its whistleblowing team and strengthen its processes to give individuals more confidence to come forward.
It has produced a digital toolkit for industry bodies, consumer groups and whistleblowing groups, has published materials for firms to share with employees, is using its events to highlight the campaign and has produced a mandatory e-learning module for all FCA staff helping them to identify whistleblowers and ensure correct handling of cases.
The issue has become more pronounced recently, particularly with the implementation of SM&CR tightening the rules covering approved individuals and a parallel debate continuing around non-financial misconduct in the workplace, often about discrimination or sexual misconduct.
In the past, both employees and regulators have expressed concerns over anonymity and that whistleblowers might be deterred by possible reprisals, further exacerbated by what has been described as a ‘culture of fear’ in City institutions. Two years ago, UK regulators said it was “critical that individuals are able to speak up anonymously and without fear of retaliation if they want to raise concerns” after fining Barclays boss Jes Staley £640,000 for trying to uncover the identity of an anonymous complainant.
In their campaign launch, the FCA address this, saying “Individuals can choose to remain anonymous, and many people do. If they do share any information about themselves, then the FCA will keep this safe. This includes not confirming the existence of a whistleblower when making enquiries, unless legally obliged to do so”.
According to data obtained by investigations firm Kroll under the Freedom of Information Act, the total number of whistleblowing tip-offs to the Financial Conduct Authority in 2019 was up 3.5 per cent on the previous year, the highest level recorded since 2015. But the biggest increase was in reports about breaches of standards of professional behaviour, which rose 35 per cent.
Kroll’s MD Benedict Hamilton commented: “This rise may be attributed to the growing awareness of unacceptable business practices being reported in the media. Stories of executive misconduct or dysfunctional corporate culture have been a common feature of news headlines. As a result, employees may be more confident about reporting inappropriate behaviour in the workplace.”
Tim Fassam, Director of Government Relations and Policy at PIMFA, also welcomed the FCA’s campaign launch but made clear that it is vital for individuals to have the confidence to come forward.
‘In recent history we have too often seen instances in which those working in the financial services sector have reported concerns to the regulator and been ignored,’ he said, adding that ‘The FCA seems to have acknowledged this with the promise that the new service will have increased resources, dedicated case managers and regular communication with whistleblowers.’
Sadly, we don’t yet live in a society which is completely transparent, fair and just. In light of the UK government’s decision not to incorporate the EU Directive on the Protection of Persons who Report Breaches of Union Law into the UK law, post-Brexit we now have a real opportunity to transform the UK workplace and guarantee everyone an environment in which they can thrive and feel safe by providing the right legal framework which supports employees and employers alike.