Gavin is a manager in the accounts department of Harmani, a self-contained subsidiary within Bettabank, a major banking group. The structure of the group means that Harmani has separate reporting lines to the main company within Bettabank, with whom it transacts large amounts of business.

The business that it transacts on behalf of Bettabank is obtained as a result of the reputation of Harmani, for providing a high level of service. Matthew is a senior manager within Harmani and, as well as overseeing the company’s operations, is responsible for liaising with Bettabank and its clients. Consequently, he is frequently involved in client meetings with his colleagues from Bettabank, who have a fairly expansive attitude towards the financing of hospitality – ‘corporate’ or otherwise – and who lose no opportunity to entertain clients and sometimes just themselves.

Matthew is concerned about this attitude but Hamish, his main contact in Bettabank, and who is the equivalent of Matthew’s own senior manager, tells him that Bettabank’s expense and entertainment policy is now so restrictive that he is embarrassed to entertain the type of client whom he is seeking to attract. Accordingly, he asks Matthew to pick up the costs, since Harmani does not suffer the same restrictions as Bettabank and, as Hamish tells Matthew, Harmani gets the main benefit of the business obtained.

Gavin is frequently asked to process these expense claims, which he feels are increasing in frequency and amount. He mentions this to Matthew, telling him that he is uncomfortable about what he is being asked to do. Matthew agrees that the situation is difficult, but Harmani benefits from the business obtained and that this is reflected in everyone’s remuneration.

Whistleblowers, however right they may be, often suffer retribution

Tacit acceptance

Gavin takes his findings to Matthew, saying to him that, while he accepts that it is not for him to tell a senior manager what to do, he feels that something ought to be done to stop what appear to be entirely spurious entertainment expenses, incurred by Bettabank, being paid for by Harmani.

Matthew thanks Gavin for sharing this information with him, but says that while he also finds it distasteful, it is a part of business life, whatever the Bribery Act may say, and in any case his Senior Executive, Robert, is aware of what is going on and appears tacitly to condone it.

Gavin is disappointed at this response, but decides that he will continue to monitor the expense claims, which continue unabated. He wonders what action, if any, he can take.

In the meantime, he receives an invitation from his professional body to a continuing professional development event on the topic of whistleblowing and he decides to attend.

At the event, Gavin hears about the increased emphasis being placed on whistleblowing by regulators in the US and how the topic is being raised increasingly in the UK by both the regulator and the Government, following a series of financial scandals in the industry. This leads Gavin to wonder whether whistleblowing might be an appropriate response to the situation regarding expense claims that he finds so troubling. If so, what should he do and to whom should he blow the whistle?

Weighing up the options

On his way home, Gavin mentally reviews his possible courses of action, conscious of the warning from the evening’s speaker that whistleblowers, however right they may be, often suffer retribution seemingly greater than the people on whom they are blowing the whistle. He considers a number of options:

• Gavin has tried to persuade Matthew that something should be done, but without success, it is unlikely he would be very receptive to a further approach. Indeed, Matthew’s own boss apparently knows what is happening and seems disinclined to take any action. Gavin concludes that he should simply ignore the matter as not being his problem, hoping that someone else will pick it up.

• He might advise Internal Audit, but is concerned that he is involved in the chain of events himself, since he has authorised his team to process all of the expenses claims. Although the books have been reviewed, internal audit may not be happy to be told that it has missed matters that it might have picked up.

• He wonders whether it might be better to report to Compliance and seek to insulate himself from any investigation, but thinks that is unlikely and so is concerned at what his position might be.

• He vaguely recalls that the Bettabank group (which includes Harmani) has an external whistleblowing helpline and he considers using that, but wonders how secure it is, or whether, as with his concerns about Compliance, the whole matter may rebound on him.

The CISI verdict

The On expenses dilemma appeared in the April 2014 edition of the Review, with members invited to register their favoured response and leave supporting comments in a survey on the CISI website.

The situation produced a spread of opinions with an equal percentage (11%) voting to ignore the matter, hoping that someone else will pick it up, and wanting to report to compliance. However 50% felt that reporting to internal audit was the right course of action, producing a large majority in favour of reporting the matter to one form or another of control function.

Although in a minority, over a quarter (28%) of respondents felt that an external whistleblowing helpline was the most appropriate channel of communication.

The question of with whom complaints should be raised is of increasing prominence and the role of the whistleblower  and the provision of appropriate supporting mechanisms is a key factor. However, in this situation, beyond Gavin’s concern that he was involved, reporting internally as a first step should be the preferred option and is in fact what is recommended in many publications on whistleblowing policy.

However, any policy which requires individuals to report situations which are of concern to them, will only be successful and sustainable, if  ‘whistleblowers’  are assured that they will not face any form of retaliation and this applies equally to internal as well as external whistleblowing.