What’s a Whistleblower Policy? Does My Nonprofit Need One?

Although it is not required by law for nonprofits to have written whistleblower policies, it is highly recommended to practice sound governance and diligent risk management. The Sarbanes-Oxley Act of 2002 (SOX) was instituted to mandate protection for employees that reveal concerns within publicly traded companies. Using many of the guidelines from the Act, The Panel on the Nonprofit Sector was formed and developed a set of recommendations for nonprofits to follow in order to promote transparency and accountability within their organizations.

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In a research study conducted, 82 percent of nonprofit employees felt their organizations were above-board and honest in their dealings, compared to 60 percent at for-profit entities and only 30 percent in the public sector. However, 69 percent of all people who have reported illegal or corrupt activities in all sectors have been forced into retirement or have lost their jobs.

Developing a risk management strategy that includes a whistleblower policy will help strengthen your organization and minimize the chances of a serious issue going public before management and board members have the opportunity to handle the situation. It will also encourage employees to come forward if they do notice a problem and mitigate losses or litigation costs due to corrupt or illegal activities if they know there will not be any retribution.

A sound whistleblower policy should include a statement letting employees know there will be no retribution for reporting an issue, who they should report the issue to and the steps that will be taken once an issue is reported. With a clear set of procedures and practices in place, employees will know how to address their concerns and understand your organization’s integrity is tantamount.

For possible sponsors and government programs, a whistleblower policy outlines your nonprofit’s moral compass and provides a measure of security due to accountability and transparency.

Does your nonprofit currently have a whistleblower policy as part of your nonprofit risk management services? Please share with us in the comments section below.

Discussing Risk at Your Nonprofit Organization

risk management for nonprofitsHow often does the word “risk” come up in conversation among you, your employees, and your board members? While talking about the what-ifs and what could go wrong may sometimes seem pessimistic, the Nonprofit Risk Management Center emphasizes that a candid discussion on risk is “essential to fortifying your nonprofit’s reputation and mission, and providing a safe environment for the people who serve and those who rely on you for services.”

But how do you even go about bringing up the subject of risk, let alone having a productive conversation on the topic? The following are some tips the Nonprofit Risk Management Center recommends:

– Don’t limit the conversation to those who deal with risk management. Invite staff members from all departments, as well as board members, to participate in the conversation. A diverse group means each area of concern can be addressed.

– “Separate apples and oranges” by coming to an agreement on what the word risk means, and remember that risk can mean events that could affect your organization’s objectives, an underlying issue or condition, or the potential for an undesirable outcome.

– Avoid limiting risk conversations to worst-case scenario situations. Encourage your team to consider and discuss potential outcomes that you would consider “better-than-hoped-for” when a risk is taken.

How do you address starting risk conversations in your nonprofit? Leave a comment below to share your strategies and ideas with us!

The best way to protect your nonprofit from risks and exposures is with a comprehensive insurance plan. Lamb Financial Group offers a variety of insurance programs, as well as risk management services, for nonprofits in New Jersey, New York, Pennsylvania and beyond. Contact us at 1-866-481-5262 to learn more about our offerings or browse our website for more information.

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Creating an Emergency Action Plan

With the official start of the Atlantic hurricane season right around the corner, it’s time to start evaluating how prepared your business is for emergency situations. As an employer, one place to start is asking yourself, “Is an emergency action plan in place for all employees to follow in the event of an emergency?”

emergency exitCreating an emergency action plan, or EAP, begins with a risk assessment. As the article “The Fury: Preparing for Natural Disasters”, from Risk Management says, once you know what’s at risk, you are better able to understand liabilities and set priorities accordingly. Then you can start developing your EAP. It is a good idea to include employees from all levels in the creation of the plan to help provide direction and to help divide responsibilities.

OSHA’s Emergency Action Plan Checklist is a great resource to turn to for guidance in creating an EAP. It covers a variety of checkpoints ranging from general issues to evacuation policies and procedures, as well as how business owners can address them in any emergency situation – not just hurricanes. Here are some helpful questions that can take you through some of these checkpoints:

– Does the plan consider the impact of these internal and external emergencies on the workplace’s operations and is the response tailored to the workplace?

– Does the plan contain the names, titles, departments, and telephones numbers of individuals to contact for additional information or for an explanation of duties and responsibilities under the plan?

– Does the plan address the types of actions expected of different employees for the various types of potential emergencies?

As you are creating your EAP, keep in mind that all EAPs should – as Risk & Insurance advises, be quick, simple, and practiced. By “quick,” we mean that plans need to be designed so that they can be executed in “a reasonable time frame that begins no more than 48 hours before a hurricane is expected to make landfall and be completed in enough time for employees to evacuate,” according to Risk & Insurance.

Keep your EAP simple by creating a checklist that will allow employees to easily identify which tasks should be taken care of and in what order. Risk & Insurance advises backing the checklists up with detailed documentation as is necessary for reference, reminding employers, “as a hurricane approaches, no one will have time for the details.”

Additionally, EAPs should be rehearsed to ensure that all steps can be completed in the limited time frame. Practicing your EAP will also let you know where adjustments need to be made. For example, you may need to spread out the responsibilities among additional employees or you may learn that a particular task takes longer than originally planned.

As you’re preparing your emergency action plan, it’s also a good idea to use the time to reevaluate your business insurance to make sure that you’re covered in the event of a hurricane or other disaster.

Contact Lamb Financial Group at 1.866.481.5262 to learn more about our services and how we can assist you in making sure your risks are properly assessed and that you’re business is adequately insured and prepared for anything.

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