The New Corporate Malaysia: Implementing Whistleblower Programs And Hotlines For Better Corporate Governance

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Malaysia was the laughing stock of the Whistleblower world barely 5 months ago when a whistleblowing politician, far from being protected under the law, was jailed 30 months instead.

With a new government now in charge in Malaysia, upholding the Rule of Law and Institutional Reforms are well underway and such bad whistleblower experiences are hopefully a thing of the past.

In Malaysia, the Whistleblower Protection Act 2010 (WBA) came into force on 15 December 2010, giving legal protection to employees against dismissals or penalties by their employers due to employee disclosure of corporate misconduct, wrongdoing and illegal activities.

With reports of hidden scandals and corporate wrongdoing increasingly common these days, new corporate leaders and directors taking over the management of companies are well advised to protect themselves against personal liabilities by carrying out compliance checks and implementing adequate procedures including Whistleblower programs against wrongdoing, corruption and bribery.

Apart from regulatory scrutiny, current and potential business partners and stakeholders often also require the implementation of internal whistle blower policies and systems as an important component of overall corporate governance.

Just having a Whistle Blower Policy is insufficient.  It must also be seen to be in force and strictly enforced.  However, in practice very often the stumbling block to effective implementation and actual use of Whistleblower Hotlines by employees include:

  1. Fear of retaliation or harassment;
  2. Fear of termination or suspension;
  3. Inadequate channels to voice concerns;
  4. No precedent of action taken by management;
  5. Employees’ doubts whether the company itself can be trusted to keep the whistleblower’s identity and the information divulged confidential.

No employee should be disadvantaged in raising legitimate concerns which serve to protect or pre-empt the company from financial and reputational risks.

Engaging an independent external party to manage the Whistleblower system can help assuage the very real concerns or fears of the employees by providing independent external channels for the employees to raise and share the wrongdoings or malpractice observed or discovered within the company.

Apart from having an adequate Whistleblower system, communication and employee training are equally critical to ensure a successful whistleblowing program.

Some of the biggest frauds in the world were detected through Whistleblower programs.

As the new Malaysia marches forward from the swamp of corruption and hidden scandals left behind by the previous administration, having adequate procedures and systems to prevent corruption, fraud and corporate wrongdoing are important components of better governance.

Implementing and managing effective Whistleblower programs will be a critical part of the corporate governance ecosystem of our New Corporate Malaysia.

Our affiliate JLPW STRATEGIC CONSULTING has been advising Tokyo Stock Exchange Listed Companies and their subsidiaries in Malaysia on Whistleblower Programs including drafting Whistleblower manuals and policies, managing Whistleblower Hotlines and employee training.

Feel free to contact them if you need help to develop, implement and manage a Whistleblower program or train your employees to use such programs:

Hiroyuki Ishizaki,
Client Services Manager,
Japan Services Group
Email: hiroyuki.ishizaki@jlpw.com.my
Mobile: +6018-0215 6751

Tan Chor Boon,
Senior Consultant
Email: chor.boon@jlpw.com.my
Mobile: +6017-236 8811

 

 

 

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