Why introduce a Whistleblower Policy within a Financial Institution

A whistleblower policy is generally designed to make it easier for agents of an organization to report irregularities in good faith without fearing that their actions will have adverse consequences for them, as well as their families.

The whistleblower policy is a key element in safeguarding the integrity of any financial institution. It aims to improve transparency, and therefore enhances the internal system of fighting against bad practices that could damage the activities and reputation of the institution.

Protecting the integrity and reputation of the institution requires the active support of all its staff who are required to report cases of fraud, corruption, collusion and coercion, and other serious breaches of rules and policies. Staff should also cooperate in investigating such incidents.

By creating a climate of trust and maximum staff protection, the Financial Institution encourages them to cooperate fully. It must therefore put in place provisions to ensure that staff who report irregularities in good faith enjoy the utmost confidentiality and the most effective protection against actual or apparent reprisals as a result of their denunciation.

The basic principles of the institution’s whistleblower policy could be:

  • Staff member must have a choice of channels for whistleblowing and communication; Under certain circumstances, they must be able to circumvent the main channels of denunciation if they are found to be inappropriate;
  • Staff members shall not be subject to reprisals for any denunciation;
  • Staff members who report incidents in good faith must be protected and their identity kept as confidential as possible;
  • Reported incidents must be verified in an appropriate manner and, if confirmed, the Bank or institution must take all necessary steps to identify appropriate remedial measures;
  • The fundamental rights of all persons involved in reported incidents must be respected, while ensuring that the procedures foreseen are effective.

The experience of Inclusion Africa in setting up such mechanisms within organizations in Central Africa has shown that this mechanism is extremely important, in view of institutional governance problems that are often characterized by massive internal fraud. Moreover, the establishment of this mechanism is a regulatory requirement in some countries, such as the DR Congo. If the mechanism operates effectively, it can help to prevent many frauds and thus oblige staff and managers to align with good governance practices.

Microfinance Professional Associations should consider the opportunity to set up this mechanism in order to be better informed and therefore play their full role in the professionalization of the microfinance sector.

Gilles da Costa
West Africa Regional Manager
Inclusion [Social Ratings]