Whistle-blowers' Allegations Should be Treated with Care
I think I was in my final year of articles at Deloitte when I first saw a sign that read "Tip-Offs Anonymous". I was intrigued and read the announcement of the new service to clients pasted all over our Durban office.
Essentially, clients would now have a safe space to report any fraud or corruption taking place in the company without fear of being victimised. Anonymous whistle-blowing is no longer restricted to employees of an organisation, and literally anyone who has any information about anything that appears fraudulent can come forward to an organisation by phone, e-mail or post, as well as the infamous shoving of a "dossier" under the doors of a head office.
However, the reporting of suspected fraud or corruption does not in itself mean that a crime was actually committed, nor does it mean a crime was committed by the person whom the whistle-blower implicates. The only way a company is able to determine this is by receiving the whistle-blower's report, performing an initial assessment of validity and credibility, then deciding on the appropriate action to take.
Why? Because as good as the service of anonymously reporting wrongdoing is, it can easily be abused by people seeking to settle personal or political scores, especially in the porous public sector.
A logical step in the assessment of the validity and credibility of anonymous allegations, especially against a senior executive of a company, would be to put them to the person and request a comprehensive response, along with corroborative evidence.
So when the news broke that Sisa Ntshona, the CEO of South African Tourism, had been suspended following "allegations received against him via the company's anonymous tip-offs reporting mechanism", I was curious.
"The board is obligated to thoroughly investigate these allegations, in the best interest of all parties concerned. In order to conduct a free and fair investigation the board has decided to place the CEO on precautionary suspension. This would allow the CEO to focus on responding to the allegations as well as guarantee the integrity and transparency of the process to be followed," the statement said.
I made three important conclusions from this statement. First, the board had notified Ntshona of the allegations — how else would he prepare a response, for which the board had so graciously given him paid leave? Second, the board must have received an initial response from Ntshona about the allegations to help it decide whether these were worthy of further investigation, and, if the allegations warranted further investigation, such investigation would be compromised if he remained in office.
Speaking to Fin24 on the day after he was suspended, Ntshona is quoted as having said: "Yesterday I was over the moon about the World Travel and Tourism Council report naming SA as the leading tourism destination in Africa — and then I get informed by the board about a whistle-blower tip-off making allegations."
What concerns me most about this matter is the precedent it sets. Basically, this means I can get on the phone tomorrow and make all sorts of allegations about any CEO, especially in the public sector, and the board will believe it is OK to immediately suspend that CEO on the back of my allegations. Better still, I can deliver and e-mail a dossier of all sorts of allegations scary enough to make the board take "precautionary measures" to allow a fair process as the organisation investigates the allegations. I can do all this with no sincere intention, and, seemingly, the board wouldn't care enough to check that.
This may be a good time for all boards to reflect on what it means to carry out one's fiduciary duty with care and skill.
This article first appeared in the Business Times section of The Sunday Times on 14 April 2019