To understand whistleblowing and its importance in risk management, it is first necessary to understand the different types of risks that businesses face daily. There are compliance risks, operational risks, and other risks that can impact a business's bottom line.
Whistleblowing helps to manage all of these risks by providing an early warning mechanism that allows businesses to identify and address issues before they become bigger problems.
Compliance Risks and Whistleblowing
Compliance risks are those that could lead to a business being fined or penalised for violating laws or regulations. These risks can be difficult to manage because they often involve complex legal issues. Whistleblowing can help compliance officers identify potential compliance risks and take steps to mitigate them.
Operational Risks and Whistleblowing
Operational risks are those that could impact a business's ability to function on a day-to-day basis. These risks can come from a variety of sources, including natural disasters, power outages, and employee errors. Whistleblowing can help businesses identify operational risks and take steps to reduce their impact.
Other Risks and Whistleblowing
Other risks are those that don't necessarily fall into the categories of compliance or operational risk. These include for example reputational risk, financial risk, strategic risks related to key initiatives of the organisation and even personal risk. Whistleblowing can help businesses identify these risks and take steps to mitigate them.
Whistleblowing is a powerful tool that can help businesses manage all sorts of risks. By providing an early warning system, whistleblowing allows businesses to identify and address problems before they become bigger issues. In doing so, whistleblowing helps to protect businesses from compliance risks, operational risks, and other risks that could impact their bottom line.
Warren Buffet's Recognition of the Value of Whistleblowing in Risk Management
Warren Buffet, the CEO of Berkshire Hathaway has been quoted as saying: " [Through our reporting channels] I have learned of important problems at our subsidiaries that I otherwise would have missed. The issues raised are usually not of a type discoverable by audit but relate instead to personnel and business practices. Berkshire would be more valuable today if I had put in a whistleblower line decades ago.”
Buffet recognises the value of whistleblowing in risk management. By providing an early warning system, whistleblowing helps businesses identify and address problems before they become bigger issues. In doing so, whistleblowing helps to protect businesses from compliance risks, operational risks, and other risks that could impact their bottom line.
Final thoughts
Whistleblowing is an important tool in managing various types of risks that businesses face on a daily basis. By providing an early warning mechanism, whistleblowing can help to identify and address these issues before they become bigger problems.
As Warren Buffet, CEO of Berkshire Hathaway, has noted, whistleblowing can provide valuable insights that may otherwise go unnoticed, and can help to protect a business from a wide range of risks. It is important for companies to establish effective whistleblower reporting channels and protect whistleblowers from retaliation.
If you're looking for a platform to collect more data to monitor your organisation's whistleblowing and misconduct reporting practices, Falcony | Whistleblowing have you covered. You can find more information on our website or contact us for a demo:
We are building the world's first operational involvement platform. Our mission is to make the process of finding, sharing, fixing and learning from issues and observations as easy as thinking about them and as rewarding as being remembered for them.
By doing this, we are making work more meaningful for all parties involved.
More information at falcony.io.
