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How whistleblowing became an industry in the wake of #MeToo


Advising companies on setting up whistleblower services has become a burgeoning industry in the wake of the #MeToo movement and a high-profile scandal at Barclays, with businesses spending up to £100,000 to establish services for concerned staff.

Demand for whistleblowing consultancies, dedicated call centres, specialist software and independent investigators has escalated after accusations against the film producer Harvey Weinstein – who has pleaded not guilty to charges of rape and sexual assault in New York – and the revelation that the chief executive of Barclays had attempted to track down an internal whistleblower.

One law firm specialising in whistleblowing cases has described a “feeding frenzy” among companies keen to put stronger safeguards and structures in place for staff seeking to flag illegal or concerning behaviour. Mary Inman, a partner at the law firm Constantine Cannon, said the £642,000 fine imposed by the UK City regulator last year on the Barclays chief executive, Jes Staley, for trying to unmask a whistleblower has triggered a surge in business for companies that provide whistleblowing programmes.

“Jes Staley handed them all a big gift,” Inman said, adding that it forced companies to think: “Wow, we’d better take these things seriously.” She said: “It was a huge reputational issue.”

Staley apologised for trying to unmask the whistleblower, who raised concerns over the bank’s hiring of the chief executive’s friend and former colleague. The Barclays boss used the bank’s internal security team and a US law enforcement agency in an attempt to track down the author of letters that flagged worries about the hire.

Alongside ever evolving regulatory requirements and the rise of the #MeToo movement, the incident helped spark a rise in demand for firms such as whistleblowing consultancies and dedicated call centres that collect tip-offs and complaints. They compete with software firms that build secure inbox software and online chat channels, offering digital alternatives to telephone hotlines. Finally, to follow up on whistleblower intel, contractors will investigate complaints or train up internal staff to do the same.

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But their services do not come cheap. Costs range from about £1,000, which may cover a basic programme audit for a small firm, to as much as £100,000 for annual software licence fees billed to a complex multinational business.

Andrew Samuels, who helped build the whistleblowing programme at Barclays bank, launched his own whistleblowing consultancy, Addveritas, in 2016 after noticing a gap in the market.

The consultancy founder says whistleblowers need to be seen as “assets rather than liabilities” who can offer information that will help retain staff, prevent fraud and protect profits. But it is important to take the time and join the dots. “Something that seems quite innocuous at the start can end up being a lot more sinister,” Samuels warned. He cited one example in which a whistleblower’s persistent concerns over unsanitary conditions in an office led to the discovery that contractors called in to deal with the problem were defrauding the firm, via a company insider.

Addveritas has competition from established rivals, including EY and Deloitte, which offer services spanning consultation and investigations. There are also call centres, secure inbox creators and chatroom “portals” run by firms including EQS, WhistleB, Expolink and Whispli, founded by the whistleblower Sylvain Mansotte.

Mansotte uncovered a A$20m (£10.3m) fraud scandal at his former employer, the Australian miner Leighton, which put one of his former colleagues behind bars. But Mansotte was originally put off by the thought of leaving a tip on his employer’s staff hotline, worrying that his French accent would give him away.

That concern spawned the idea for Whispli, which offers a digital inbox and online chatbox that generates new identities for every whistleblowing report. Those reports cannot be traced back to the employee until they are comfortable coming forward, he explained.

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The company – run by about 20 staff, with offices in Australia, the US and France – is raking in annual licensing fees of between £10,000 to £100,000 per client. “It predominantly depends on the number of countries you’re plugged into, the number of languages you need,” he said.

The whistleblower-turned-entrepreneur estimates that the wider industry is worth as much as $2bn in the US and $4.5bn globally – and investors are taking notice.

Whispli, for example, is expecting to raise more than $10m in its next funding round. Another player, Navex Global, which owns the whistleblowing portal called EthicsPoint, was snapped up by the private equity firm BC Partners last year in a deal that valued the firm at $1.2bn. A separate US competitor, Convercent, has attracted about $80m in funding since 2013.

Whistleblower lawyer Inman says the space is getting crowded. “They seem to show up at a lot of compliance conferences – they all have booths and they’re all selling something. So I think it’s a big industry that you’d expect would crop up as soon as all the Fortune 500 and FTSE 100 companies need to have these gold-plated whistleblower programmes.”

She expects most companies to make a beeline for “plug and play” products, such as anonymous hotlines, that are quick and easy to use. But the real work is building a corporate culture that encourages and supports whistleblowing across the business.

“It’s a cultural change that needs to happen. And what needed to happen in Barclays was the tone from the top,” Inman said. “We really need to mean it when we say: ‘We want to hear from you about problems.’”

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Five historic whistleblowing scandals

Enron Sherron Watkins, a former vice-president at Enron Corp, tried to warn her bosses of a massive accounting fraud only months before the world’s biggest energy firm collapsed into bankruptcy in 2001.

Olympus The Olympus president, Michael Woodford, uncovered a £1bn accounting fraud at the Japanese digital camera firm in 2011 after flagging suspicious payments made in the course of corporate takeovers. It led to the conviction of three former executives.

Danske Bank Howard Wilkinson, who served as the head of Danske Bank’s trading unit in the Baltic region until 2014, blew the whistle on an alleged €200bn (£178bn) money-laundering scandal at the lender.

HSBC Hervé Falciani, an IT specialist, exposed wrongdoing at HSBC’s Swiss private bank, which allegedly turned a blind eye to tax evasion and money laundering by account holders. He fled from Switzerland to France in 2008 with a list of 130,000 names of organisations and individuals who were using secret Swiss accounts and handed them to French regulators.

GSK The pharmaceutical group’s former quality control manager Cheryl Eckard exposed a series of contamination problems at a drugs factory in Puerto Rico, and a subsequent cover-up by company bosses, in 2002.



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