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What this means
Anyone in your organization should feel they can come forward and report anonymously without any fear of retaliation. This also applies to third parties, such as consumers, suppliers, contractors and distributors. An effective reporting system is an important part of a strong culture of compliance within your organization.
For your compliance program to work, you should develop confidential, secure and easy mechanisms to raise compliance concerns, and to ask and answer compliance-related questions.
A small reminder on what makes a compliance program credible and effective
Your compliance program needs to be credible and effective to truly help you.
To be credible, your program must at a minimum show your business’ genuine commitment to obeying the law and competing fairly.
To be effective, your program must inform all your people, and those acting for your organization, that compliance is important. It must inform them of their legal duties and your internal compliance measures. It should also give you the tools to prevent and detect misconduct.
Your program should be reasonably designed, implemented and enforced in the circumstances. This means that it addresses your organization’s risks within your resources and in light of your business activities.
Why it matters
Reporting is a vital yet delicate step in the compliance process. It ensures that your employees and third parties can provide timely and reliable information about risky behaviour or potentially illegal activity, or raise questions they might have.
Without a reporting system, your compliance program cannot be truly effective and credible. A reporting system can help you detect misconduct early. It can also give you valuable data that you can use to spot trends in compliance issues.
Overall, a strong system helps you show that your organization takes compliance seriously.
If you’re a small business...
Small businesses don’t have to spend a lot of money building complicated reporting systems. Below are a few tips to consider:
- An anonymous reporting box or online reporting system can help.
- Occasionally, the compliance officer can talk quietly with employees off-site and ask about any concerns. This does not replace an anonymous system, but can be very effective in identifying concerns and answering questions.
- The organization’s external accountant or lawyer can be used as a contact for employees to report concerns.
- Interviewing employees when they leave your organization (exit interviews) can also help in identifying concerns.
How you can create effective reporting mechanisms
Infographic 04 A - How you can create effective reporting mechanisms
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Use effective reporting systems
To create effective reporting systems, your organization should:
- Encourage a speak-up culture
- Create a formal reporting process
- Respond to questions and concerns
- Protect whistleblowers
For your reporting system to support a credible and effective compliance program, your organization should:
Encourage a “speak-up” culture
- Senior management should encourage your employees and third parties dealing with your organization (such as customers, suppliers, contractors, distributors) to speak up, obtain advice, ask questions and report any compliance concerns
- Because retaliation is a common reaction to criticism, make managers aware of this risk. Through their words and actions, your management should reassure employees that no adverse action will be taken against people who report concerns
- Train your managers on how to respond to concerns effectively
Create a formal reporting process
- Clearly identify which actions should be reported, and when, how and to whom they should be reported
- Create reporting channels that are simple, safe, secure and confidential
- Adopt a system suitable to your size, operations and risk profile. Some examples include:
- a 24-hour helpline
- confidential feedback boxes
- online reporting systems
- a designated legal counsel as a point of contact
- a designated committee of the board of directors
- the compliance officer
- an independent system operated by a third party agency
- Large companies may want to consider having multiple reporting channels
- Share information about reporting mechanisms widely throughout the company and make it known to all employees and appropriate third parties
Respond to questions and concerns
- Reporting systems will not be useful if your organization does not follow up on all reports
- Your responses should be prompt, effective and adequate to meet the concerns raised
- Provide feedback to those who report concerns in a timely manner so they know their report has been taken seriously, but with due respect for privacy of all those involved
- Carry out appropriate investigations and take suitable action
- The compliance officer should be empowered to coordinate a detailed, professional investigation of compliance issues; and take necessary steps to stop ongoing misconduct and prevent future problems.
- When an investigation finds that the law was broken, act quickly and cooperate with the Competition Bureau fully
- Document the responsive actions you take
Protect whistleblowers
- To inspire confidence in the reporting system, all people reporting concerns should be protected from retaliation
- Retaliation is a serious and pervasive risk; so depending on the circumstances in your organization, consider treating retaliation as a separate risk area in your risk assessment
- Sensitize your managers to the fact that unfair criticism of a whistleblower is retaliation
- Your human resources department should advise the compliance team and/or senior management if it observes or hears about any retaliatory action taken or threatened against a whistleblower
- Investigate all complaints of retaliatory threats or actions
- Follow up on any findings of retaliation with strong disciplinary measures
- As far as possible, respect someone’s request for anonymity. However, be candid in explaining confidentiality and anonymity. You might have to disclose information in litigation. Work to protect personal information but recognize you cannot guarantee confidentiality
- People in at-risk roles should also be trained about the Competition Bureau’s Immunity and Leniency programs and whistleblowing initiatives.
DISCLAIMER: Because every situation presents unique facts, the information set out herein is provided for general information only. This content is not a substitute for legal advice, nor is it a binding statement of the Commissioner of Competition’s position on the requirements or efficacy of any particular compliance program. Indeed, there is no one-size-fits-all approach when it comes to achieving credible and effective compliance.
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