LiveHire is the first smallcap to get a whistleblower policy out the door
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Blowing the whistle on government misdeeds will still land you with a visit from the federal police, but calling out bad behaviour in a company now has a few more protections around it.
New rules, passed by Parliament in February, came into play yesterday and all public companies must have a whistleblower policy by the start of 2020.
So far the only small cap to raise their head above the parapet is LiveHire (ASX:LVH), which issued a 12-page document on Friday outlining its policy.
LiveHire’s policy says whistleblowers “will report” illegal or unacceptable conduct, information they suspect could be improper around the company’s tax affairs, misconduct “in relation to any member of the group”, and anything that might break the Corporations Act or “represents a danger to the public or the financial system”.
The company has nominated company secretary Charly Duffy as “whistleblower protection officer”, but corporate cop ASIC also wants to get a direct feed from people with information via a new a tip-off site.
ASIC has been getting punchier, deputy chair Daniel Crennan QC said at the regulator’s annual get-together in May, but some small cap investors remain unconvinced it takes their end of the market seriously after instances such as LWP Technologies (ASX:LWP), where the corporate cop said there wasn’t enough evidence to follow through with prosecution. Investors plead otherwise.
The penalties for breaking the new rules are heavy.
For revealing a whistleblower’s identity or threatening them with harm, the courts can now fine individuals up to $1.05m and companies $10.5m, or 10 per cent of annual turnover up to $525m.
The reforms have been a long time coming.
ASIC first backed the changes to the Corporations Act in 2017, saying during a government review of whistleblower laws that it wanted protections broadened to cover more people and also give them the ability to receive compensation if the rules were breached.
It did not back financial incentives to encourage whistleblowing, and these did not make it into the final changes.
The reforms provide protection around these main areas:
ASIC cautions, however, that it doesn’t decide who is a whistleblower and who isn’t, now that it’s better enshrined in law, nor are they responsible for helping a person access compensation if they’ve paid a harsh price for their disclosure.
“We value the people from inside companies and organisations who come to ASIC with reports of potential misconduct or breaches of the law. Whistleblowers provide ASIC with important information and help us enforce the laws we administer to address and prevent harm to consumers,” said ASIC commissioner John Price.
Law firm MinterEllison said in February when the changes were made that companies would “ideally” want a policy in place from July 1, or a way of dealing with complaints.