Whistleblowing, bullying & harassment and breaching conduct rules

  • 1 July 2020
  • Blog | Professionalism and Ethics | Blog

The culture of an organisation often sets the tone for how employees conduct themselves. Take the Lloyd's of London Scandal in 2019 in which the biggest and oldest insurance market was described as a "meat market" (1). An organisation-wide survey found that 8% stated they had encountered sexual harassment or witnessed it happen to others in the past 12 months. The survey also revealed 20% of respondents had seen Lloyd’s personnel turn a blind eye to inappropriate behaviour.

Our experience at Protect is that it often takes a high-profile case to really understand why whistleblowing is vital to a well-run organisation.  Lloyd's went on to threaten lifetime bans for individuals found guilty of improper behaviour and fines and bans for firms that employ them with John Neal, Chief Executive, saying he was 'determined that we create a working environment at Lloyd's where everyone feels safe, valued and respected. (…) Cultural change takes time."

How individuals conduct themselves professionally, and the culture of an organisation are of vital importance. Individuals and culture play a key role in promoting high standards of professionalism, commitment to ethical conduct, and improving trust and confidence in the financial sector.

In an environment where workplace 'banter' goes too far and bullying and harassment is rife, workplace relationships deteriorate, the productivity and cooperation of teams are damaged, individuals are afraid to speak up and it becomes a breeding ground for corruption and a lack of transparency.

Bullying and harassment are issues which are usually best dealt with by the affected worker asserting their own private employment rights, through a grievance-type process. Typically, such scenarios are unlikely to satisfy the 'public interest' requirement needed to qualify for whistleblower protection under whistleblowing legislation, the Public Interest Disclosure Act 1998.

However, there are circumstances where whistleblowing may be the appropriate step to take. For example, where it is not an isolated incident but where there is a 'culture' of bullying and harassment; where a significant proportion of the workforce is affected which may have a wider impact that could encompass a 'public interest'. For example, if the impact is on the work the firm does and there is a wider risk to consumers or to the market.

Consequently, regulators and professional bodies have started taking a stricter position on this type of non-financial misconduct. The Chartered Banker's Institute itself states that individuals in the banking sector should, at all times, observe and demonstrate proper standards of market conduct, and give due care and consideration to others, putting the public interest first. 

The Financial Conduct Authority (FCA) have also stated that improving culture in financial services is a key priority, specifying that participating in or permitting the continuance of bullying and harassment could be a breach of conduct rules. In a letter to CEOs, the FCA highlighted that the way in which a firm handles non-financial misconduct throughout the organisation (including discrimination, harassment, victimisation and bullying) is indicative of a firm's culture. The expectation is on firms and senior managers to embed healthy cultures and take responsibility for what happens in their areas. A senior manager's failure to take reasonable steps to address non-financial misconduct could be a breach of Senior Managers and Certification Regime (SM&CR) and could lead the FCA to determine that they are not fit and proper.

Driving towards healthier cultures depends on the involvement of firms and their leaders. Training is a great way of doing this. This includes training amongst the workforce itself, on proper conduct or when workplace 'banter' can go too far. People make a difference at work and the quality of workplace relationships will have huge impact on culture. Further, training of top-down management on how to identify and modify drivers of the firm's culture and how to ensure a healthy speak up environment will be vital in helping to stop bullying and harassment before it is too late.

  1. https://www.theguardian.com/business/2019/sep/24/survey-reveals-scale-of-sexual-harassment-at-lloyds-of-london

By Rhiannon Plimmer-Craig,writing on behalf of Protect the UK’s whistleblowing charity.  Protect aims to stop harm by encouraging safe whistleblowing. Its free, confidential Advice Line supports more than 3,000 whistleblowers each year who have seen malpractice, risk or wrongdoing in the workplace.

The Institute’s “Speak Out” initiative, launched in 2018, offers members a unique service by signposting whistleblowing support through a completely anonymous digital solution. Members can access the service here.