'Significant missed opportunity' - super funds in whistleblower blast

An investor group representing superannuation funds has slammed the poor state of whistleblower systems in this country saying it is "taken aback" by the outdated and vague procedures available to those seeking to call out poor behaviour.

The Australian Council of Superannuation Investors (ACSI) found significant gaps when it examined codes of conduct and whistleblower policies at Australia's 200 biggest listed companies, and says the results are "disappointing" - particularly given the intense focus on corporate culture amid misconduct scandals not least the financial services royal commission.

ACSI says poor corporate culture can be directly linked to weak codes of conduct and whistleblowing systems, saying failures in these areas represented a material risk to the "reputation, licence to operate and value” of companies.

ACSI chief Louise DavidsonCredit: Jesse Marlow

It says many companies appeared to have a "tick-a-box" mentality, saying it planned to raise the shortcomings in meetings with companies and wants other investors to do the same.

More than half of the the codes of conduct released by big companies failed to mention big issues like money laundering, cyber security and human rights; and more than a third failed to address the issue of corruption, ACSI found.

And many were outdated; 8 per cent were more than five years old and more than half were undated or at least two years old.

When it came to how companies catered for whistleblowers, ACSI found that many whistleblowing systems did not offer anonymity, were not accessible outside work hours or failed to make it clear that retaliation against whistleblowers was not acceptable - surprising "given that whistleblowing is intrinsically linked to ethical conduct".

Noting that whistleblowers were the initial source for a "significant number" of detected frauds, ACSI found that among the ASX200 companies, 38 did not refer to whistleblowing in their codes of conduct at all.

Commissioner Kenneth Hayne of the banking royal commission.Credit: Eddie Jim

ACSI chief executive Louise Davidson said the she found it "hard to fathom" how so many big companies tolerated such significant gaps in their codes of conduct and whistleblowing systems.

“Unless codes of conduct provide guidance to employees on where to go to report misconduct and other important information... how can companies expect their whistleblowing systems to be effective? We think this is a significant missed opportunity,” she said.

The research also comes as the senate economics committee scrutinises the Turnbull government's draft corporate whistleblower protection laws; ACSI says the draft laws are a "major step forward", but wants them to include a requirement for annual public disclosure on the implementation of whistleblowing policies by companies.