Sunday, January 25, 2009

Why the USCF Needs a Whistleblower Policy

In October 2007 when I was discussing with Bill Hall the steps to take in regard to the allegations presented in the Mottershead report it became clear there were no formal procedures in place to be able to resolve such concerns. The organizations code of ethics tends to focus on behaviors related to participation in activities sponsored by or sanctioned by the USCF and the standards of conduct tends to focus on USCF officer behavior relating to board meetings. Having incomplete processes to funnel concerns about inappropriate behavior of our directors, in my view, encourages leaks to occur and fosters a climate of premature litigation.

These days many nonprofit organizations require their directors, other volunteers, and employees to observe high standards of business and personal ethics in the conduct of their duties and responsibilities. Employees and representatives of the organization must practice honesty and integrity in fulfilling their responsibilities and comply with all applicable laws and regulations. These organizations have a process to follow if anyone feels that the organizations code of ethics has been violated or that there has been a lack of compliance with any law, regulation, standard, or rule by its representatives. Such standards usually apply to all behavior occurring during or at an activity or function that is associated with the organization and even addresses related objectionable public behavior by these individuals outside of organization activities that can reflect negatively on the organization. To enforce these standards there needs to be associated complaint as well as disciplinary procedures. The policies for addressing behavior under the auspices of the Executive Director have many precedents in the corporate world but what about that of our volunteer leadership?

In late December the IRS announced the release of the final 2008 Form 990. Some of the most significant changes to the new 990 are the required disclosures related to governance and compensation of officers, directors and key employees. Because of the new reporting requirements, many organizations will need to reevaluate their overall governance policies and procedures, as well as the composition and responsibilities of the board of directors. In some cases these changes will be significant and will require considerable time and resources to implement. Line 13 of Part VI of the 2008 Form 990 asks whether the filing organization has a written whistleblower policy. A whistleblower protection policy outlines an organization’s approach to situations of whistleblowing, and establishes procedures for the reporting of inappropriate behavior. A whistleblower policy encourages staff and volunteers to come forward with credible information on illegal practices or violations of adopted policies of the organization, specifies that the organization will protect the individual from retaliation, and identifies those staff or board members or outside parties to whom such information can be reported.

Whistleblower reporting mechanisms are a means of both improving the internal control environment that discourages inappropriate conduct, and reducing the loss exposure if a problem occurs. Whistleblower reporting systems are now a best corporate practice. Formal collection mechanisms for whistleblower complaints should be adopted by all nonprofits. At this point, Boards of Directors who do not address this area of concern will be criticized.

Note having a better way to report a concern regarding our leadership’s behavior compliant with good practice is but one dimension of an organizational problem that does not preclude improvements in our standards of conduct or associated disciplinary procedures.

For further information see:

Good Governance

Policy Challenges

Sample Whistleblower Policy


  1. Welcome to the blog Wayne.

    I'm not sure how a defined whistleblower policy would have helped prevent the situation that USCF now finds itself in.

  2. Wick,

    Thank you. To your comment - In and of itself it may not have. Note I did not argue to your point. However, I would submit, if there was a more comprehensive standards of conduct for directors and an actual productive path to resolve a concern with associated behavior without retaliation one could speculate the situation today may be different. An organization has to start somewhere, and in my view, having a mechanism for those on the inside to report concerns is an easy first step towards building an environment of trust and openness so that volunteers and employees are prepared to bring forward issues without fear knowing that their concern will be treated confidentially and resolved appropriately.

  3. I was referring to RedState, which banned me without explanation. To this day, I have no idea what I said.