PwC has very graciously allowed me toshare with you a copy of their report on this topic. I have included it in the files Ishare.

As PwC suggests, this is a fine timeto review the organization’s internal processes for handling complaints. Theyaddress the following areas, with suggestions for each:

·        Review internal reporting mechanismsand nonretaliation policies

These policies should define expectations specific to employeesand relevant third parties such as customers, contractors, suppliers, andagents.

·        Ensure internal processes to investigateand resolve issues are robust

Under the new rules, individuals considering making awhistleblower claim externally have 120 days to do so (120-day “look back”provision). If individuals believe that the company will investigate issuesquickly, they may be more inclined to report internally first, while retainingthe right to go to the SEC in the event they are not completely satisfied — inessence, giving the company a chance to address the issue first.

Companies should focus communication efforts on the benefits ofinternal reporting. However, actions speak louder than words. As such, theburden will rest on the company to ensure that issues reported internally willin fact be investigated and resolved well within the 120-day time frame. Peoplereporting issues are likely to run out of patience quickly if they believetheir concerns are not being taken seriously or addressed in a timely manner.

·        Revisit communications and trainingon your internal reporting and non-retaliation policies and processes

As with any new or updated policy, companies need to make surethat employees and other relevant parties are consistently informed of company expectationsand their own individual rights and obligations. Frequent reminders andreinforcement through varied communication channels will help to get themessage out.

·        Review your compliance confirmationprocess

This process serves as an additional opportunity to reinforce themessage on the company’s ethics and compliance related expectations and supportingresources. However, it’s important to recognize that the code complianceconfirmation process may leave the company exposed to situations in which anindividual confirms observing or reporting misconduct but withinsufficient information for management to determine whether, in fact, thematter was properly addressed.

·        Ensure you have validation proceduresto confirm that the operational aspects of the ethics and compliance programare working effectively

Certainly the best defense against any external whistleblowerclaim and the resulting government investigation is prevention of themisconduct in the first place, or early detection and mitigation. Althougheffective compliance and ethics programs can help to prevent misconduct, the2011 Compliance Week State of Compliance Study confirms that companies have difficultymeasuring the effectiveness of their programs and many do not evaluate theirprograms at all. Further evidence that routine monitoring is a challenge forcompanies came in a recent ECOA survey, which found that only 12% felt they dida good job. Although the new whistleblower provisions themselves do not add requirementsto evaluate ethics and compliance program effectiveness, it is advisable tocheck that your overall ethics and compliance program is designed and operatingeffectively and that relevant information is being appropriately communicatedup and down. The best defences against an external whistleblower claim and thepossible resulting government investigation is prevention of the misconduct inthe first place, or early detection and mitigation — the roles that ethics andcompliance programs are intended to perform.

Specifically,focus should be placed on designing and implementing performance metrics thatallow you to monitor your ethics and compliance performance. It may also be agood time to review technology options to refine or create effective,integrated dashboards for greater insight into available data.

PwC closes very effectively with this:

SEC whistleblower rules should already beembedded in an ethics and compliance program that follows leading practices.Fundamentally, the best solution to the recent whistleblower rule changes is ahealthy corporate culture where employees readily speak up to report concerns,and operating procedures that both sustain this culture and properly deal withissues.