FSS Prepares Plan to Promote Compliance Reporting
Former Executives and Outsiders Now Eligible to Report
Reporting Expanded to Include All Executives and Employees
Stronger Protection for Compliance Reporters
From now on, instead of the term "internal whistleblowing," which carries a negative connotation, the term "compliance reporting" will be used. The subjects of reporting will be expanded to include former executives and employees as well as outsiders, and the scope of reportable cases will also be broadened. Additionally, measures to protect compliance reporters will be strengthened.
On the 3rd, the Financial Supervisory Service announced that it has prepared a "Compliance System Activation Plan" to enhance incentives so that anyone can safely report illegal or unfair acts.
First, the term will be changed to the positive expression "compliance reporting." The existing term "internal whistleblowing" was judged to discourage reporters due to its negative connotation.
The subjects of reporting will also be changed to allow anyone, including former executives and employees, customers, and other outsiders, to report. Currently, only bank executives and employees can report illegal or unfair acts of other executives and employees.
The scope of reportable cases was previously limited to illegal acts or unfair orders by "supervisors," but it has been expanded to cases where illegal acts are ordered or requested by "other executives and employees regardless of rank." However, sexual harassment and sexual assault, which have low relevance to financial accidents, will now be reported through a separate reporting center.
Measures to protect compliance reporters from disadvantages will also be strengthened. To more thoroughly guarantee the anonymity of reporters, various reporting channels will be introduced, such as channels operated by independent companies or mobile-based anonymous reporting channels.
The confidentiality obligation will also be expanded. Even in personnel processes such as expense processing for rewards and separation of reporters and reported persons, confidentiality obligations will be imposed on personnel involved in the reporting process to prevent the identity of the reporter from being exposed.
Furthermore, the reward payment review process will be conducted while keeping the reporter's identity information confidential. In addition, the types of disadvantageous measures against reporters will be specified, and those who take disadvantageous measures will bear the burden of proof in practice.
It is also specified that even if a compliance reporter was involved in illegal acts, disciplinary action may be reduced or exempted if the acts are reported.
Moreover, a structural fund system will be established to cover costs such as director fees and attorney fees upon request by compliance reporters, and the reward calculation standard will be set to pay a certain percentage of the accident amount.
The Financial Supervisory Service explained, "We plan to regularly inspect and supplement the operation status of banks' compliance reporting systems to ensure the early settlement and smooth operation of the compliance reporting activation plan," and added, "We will reflect the establishment and operation of the compliance reporting management system in the management duties of CEOs and others in the accountability structure."
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