Little Support For Whistleblowers In NZ Companies

Media Release
21 May 2008

Little Support For Whistleblowers Among New Zealand Private Companies

Less than a third of New Zealand’s privately-owned businesses have measures in place to accommodate potential whistleblowers, according to the Grant Thornton International Business Report.

The figure is low compared with the global average in the Grant Thornton survey, which is 45%. But it is six percentage points higher than among Australian privately-held businesses.

“The lack of support for potential whistleblowers is a little alarming and could mean that medium-sized companies in New Zealand are more at risk of being ripped off by dodgy workers than has been assumed,” said Grant Thornton New Zealand spokesman Peter Sherwin.

“It may be a sign of reluctance to rock the boat in mid-sized companies that have smaller workforces, closer boss-and-staff relationships and other such issues to consider. But the effect on smaller companies of rorts and malpractice can be of greater magnitude than in corporates, in some cases potentially having the ability to bring down a business, so it is surprising that more private companies do not have systems in place to support whistleblowers.”

Mr Sherwin said one factor that could influence the New Zealand position was an inherent Kiwi attitude of not wanting to see “dobbing in” develop as a norm.

“New Zealanders do show a distaste for the practice of dobbing in people who transgress in all sorts of situations and this may well be reflected in mid-sized companies’ systems for dealing with whistleblowers,” he said. “However, if they apply this approach they have to realise it can be at financial or human risk and they have to weigh up these factors in deciding whether to have a support system in place.”

Mr Sherwin said that, without sufficient measures in place, whistleblowers could be victimised as informants or traitors rather than a valuable early-warning system that could save lives, money and reputations. In more simple situations, underlying issues in a company could remain undetected.

Alex McBeath, Grant Thornton’s global leader on privately-held businesses, said: “Often whistleblowing can be the only way that information about issues such as rule breaking, criminal activity, cover-ups and fraud can be brought to management’s attention before serious damage is suffered.”

Brazil is the top country in terms of privately-held businesses accommodating whistleblowing (85%), followed by Denmark and Sweden (both 71%). Regionally, Latin America has the highest percentage of businesses with support for whistleblowers and East Asia the lowest. Greek businesses are at the bottom of the table (18%).

ENDS

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