External whistleblower activity can be very costly in the auto industry.
As the industry continues to develop, prevention of whistleblower claims will only grow in importance. It’s an issue that can impact every company within the industry, both foreign and domestic. Retaining employees is one method of minimizing the risk of whistleblowing. Compliance can also be an effective method.
The SEC whistleblower program has resulted in numerous Foreign Corrupt Practices Act (FCPA) penalties and announced settlements. In addition, with studies showing that most whistleblowers are motivated by reasons other than money (i.e., whistleblowing often occurs because employees are disgruntled or terminated, or because an employee believes internal reporting was not taken seriously), even companies that are not publicly traded should be concerned about whistleblower activity.
Minimizing whistleblower risk, to a large degree, starts with an effective compliance program. An effective compliance program, supported by a culture of compliance where employees are encouraged to speak up and internally report potential violations of law, is the best weapon to prevent external whistleblower activity. The more effective internal handling of compliance lapses is, the less likely external whistleblowing will occur.
Specific compliance measures auto companies should consider to minimize the risks of external whistleblower activity include:
This list was generated as part of a Legal News: Government Enforcement, Compliance & White Collar newsletter by Scott Frederickson, Jaime Guerrero, Greg Husisian, Zaldwaynaka (Z) Scott, David Simon and John Turlais titled, “The Foreign Corrupt Practices Act and the New Trump Administration: Your Top Ten Questions Answered.” Click here for the original publication.