Whistleblowing Won't Work in Malaysia
Whistleblowing won't work in Malaysia
Author: David Lehmann
This statement represents a commonly held belief among some business people here in Malaysia about the success of implementing an anonymous whistleblowing service. One of the reasons cited for this belief is ‘culture’, that is the Malaysian culture of preferring to ‘keep things to ourselves’ or it ‘not being in our nature to do that.’ Another reason often cited is that such a service would only receive ‘poison pen letter’ complaints.
Our experience and success in providing whistleblowing services globally, including Malaysia, suggests that these statements and the reasons for making them are untrue. Whistleblowing is a significant means of detecting fraud and corruption and should be part of an overall control framework. According to the Association of Certified Fraud Examiner’s Report to the Nation in 2008 (US), 46.2% of fraud incidents examined, were detected by tips, an increase from 34.2% in 2006. In 2006, the next highest means of detection was by ‘accident’ at 25.4%, decreasing to 20% in 2008. In 2008, detection by ‘internal controls’ at 23.3% took over from ‘accident’ as the second highest means of detection. So, in 2008, fraud detected by tips was almost double that of the next detection method.
The Malaysian Government’s commitment in the recent budget to formulate a ‘Whistle Blower Act’ to encourage informers to disclose corruption and other misconduct supports the contention that whistleblowing is an important measure in the fight against fraud and corruption.Whilst it is important for an organisation to have whistleblowing policies in place that outline reporting processes and articulate a commitment to the protection of whistleblowers, it is equally important to provide an anonymous whistleblowing mechanism such as a hotline. In the US, it is mandated by the Sarbanes-Oxley Act 2002, that all public companies have such a mechanism.Anonymous whistleblowing mechanisms have equal application
Author: David Lehmann
This statement represents a commonly held belief among some business people here in Malaysia about the success of implementing an anonymous whistleblowing service. One of the reasons cited for this belief is ‘culture’, that is the Malaysian culture of preferring to ‘keep things to ourselves’ or it ‘not being in our nature to do that.’ Another reason often cited is that such a service would only receive ‘poison pen letter’ complaints.
Our experience and success in providing whistleblowing services globally, including Malaysia, suggests that these statements and the reasons for making them are untrue. Whistleblowing is a significant means of detecting fraud and corruption and should be part of an overall control framework. According to the Association of Certified Fraud Examiner’s Report to the Nation in 2008 (US), 46.2% of fraud incidents examined, were detected by tips, an increase from 34.2% in 2006. In 2006, the next highest means of detection was by ‘accident’ at 25.4%, decreasing to 20% in 2008. In 2008, detection by ‘internal controls’ at 23.3% took over from ‘accident’ as the second highest means of detection. So, in 2008, fraud detected by tips was almost double that of the next detection method.
The Malaysian Government’s commitment in the recent budget to formulate a ‘Whistle Blower Act’ to encourage informers to disclose corruption and other misconduct supports the contention that whistleblowing is an important measure in the fight against fraud and corruption.Whilst it is important for an organisation to have whistleblowing policies in place that outline reporting processes and articulate a commitment to the protection of whistleblowers, it is equally important to provide an anonymous whistleblowing mechanism such as a hotline. In the US, it is mandated by the Sarbanes-Oxley Act 2002, that all public companies have such a mechanism.Anonymous whistleblowing mechanisms have equal application