Recent surveys conducted by the ECFA (Evangelical Council for Financial Accountability) reveal that some churches have no established written whistleblower policy.
When asked if their church had a written whistleblower policy, only 16.2 percent of the responses from non-ECFA accredited churches agreed that their church had a written policy while nearly 60 percent of ECFA accredited churches agreed that their church had a written whistleblower policy.
Failing to implement a written whistleblower policy is an oversight that could expose churches to a heightened risk of retaliation claims.
What is retaliation? Retaliation claims can come from an employee who reports workplace misconduct such as fraud or theft, experiences negative consequences for reporting, and claims that the consequences imposed upon them for reporting the misconduct are retaliation. (The US Equal Employment Opportunity Commission’s definition can be found here.)
Given the number of retaliation claims in recent years, it is important that churches consider the likelihood of such claims and take steps to ensure that employees can report wrongdoing—financial or otherwise—without fearing retaliation.
“Since 2009, retaliation charges eclipsed race discrimination as the most common basis for filing of discrimination,” the Society for Human Resource Management reports. “Nearly 43 percent of private-sector charges filed in 2014 included retaliation claims.”
Methods of workplace retaliation varied according to statistics reported by Forbes. Some methods of common workplace retaliation that Forbes notes are threat of job loss, pay reduction, and abuse coming from management.
The National Business Ethics Survey (NBES) conducted by the Ethics and Compliance Initiative (ECI) reveals that an effective method for reducing retaliation is to maintain a work environment where employees are welcome to report wrongdoing.
The NBES survey results show a huge disparity in the types of organizational cultures as they relate to retaliation. “The research shows that in organizations with effective, values-based ethics and compliance programs, employee reporting of wrongdoing increases by 61 percent,” the ECI reports. “These values-based program efforts also decrease retaliation by as much as 93 percent.”
Though some churches may fear that encouraging reports of wrongdoing exposes them to risk or criticism, the NBES survey shows that the right policies and programs have the opposite effect: they make churches more secure.
“Eighty percent of employees report observed misconduct when ethics cultures are strong, compared to 55 percent in weak ethics cultures,” the ECI reports on the findings. “Only 4 percent of reporters experience retaliation in organizations with the most effective [ethics and compliance] programs, whereas 53 percent of reporters say they face retaliation in organizations without effective E&C programs.” Those are major differences.
Churches have a real interest in protecting employees who report misconduct. For example, The Association of Certified Fraud Examiners found in its report that tips from concerned persons are by far the most common way fraud is detected, at 30 percent for organizations with less than 100 employees and nearly 44 percent for organizations with 100 employees or more. The next closest detection methods accounted for only 15 percent (under 100 employees) and 19 percent (100 employees or more) of fraud detection.
Churches should assess whether or not their church environment is a place where staff feel that they can safely report wrongdoing, such as fraud or misconduct, and churches should consider whether all staff members are held equally accountable for their actions.
Accountability is key in reducing retaliation claims, the NBES survey shows.
“When employees at all levels are held accountable, retaliation is not as prominent,” the ECI reports. “The retaliation rate is only 16 percent when managers are held accountable compared to approximately 40 percent when managers are not held accountable.” For churches hoping to avoid punishing someone for having the best interests of the church in mind—not to mention potential lawsuits—that difference is hard to ignore.
To help ensure accountability, churches should create a whistleblower policy as well as an accountable culture that together open the door for staff at all levels to report misconduct. By creating a policy, churches can take steps to encourage accountability and reduce the risk of retaliation claims.
“Whistleblower Policies and Church Culture” from the May issue of Church Finance Today explores whistleblower policies—including key elements every church should include.
Elizabeth Jackson is a freelance writer living in Wheaton, Illinois.
This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations."
Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.