Freshfields whistleblowing survey 2023: the Hong Kong perspective

Stephanie Chiu, Counsel and Head of Asia People & Reward, and Rachel Harris, Associate, People & Reward, of global law firm Freshfields Bruckhaus Deringer, reflect on the results of the firm’s latest whistleblowing survey with a spotlight on trends in Hong Kong, where attitudes to whistleblowing remain generally positive, although some work still needs to be done.

The results of the latest Freshfields whistleblowing survey suggest that attitudes towards whistleblowing remain positive in Hong Kong. Over 2,500 participants across 13 industries and five regions (the UK, the US, France, Germany and Hong Kong) responded to the survey, which aims to gauge attitudes towards whistleblowing. This is a survey we run every three years and was last conducted in 2020.

In recent blog posts, we examined the impact of hybrid working on speak-up culture and the US trends emerging from the survey results. In this article, we consider the key points for Hong Kong, particularly compared with the results of the 2020 whistleblowing survey, as well as the key takeaways for employers.

Increased involvement in whistleblowing

Overall, 47% of respondents in Hong Kong reported being involved in whistleblowing in some way, whether as the whistleblower, the recipient of a whistleblowing report or seeing a colleague blow the whistle. This is slightly higher than the percentage of respondents who reported the same in all five jurisdictions (43%) and was surpassed only by the US (60%).

As in the 2020 survey, Hong Kong topped the charts for the number of respondents who have been whistleblowers themselves, at 27%. The average across the five jurisdictions was much lower, at 17%. In 2020, the proportion of Hong Kong respondents who identified as having been whistleblowers was 19%.

The increased involvement in whistleblowing suggests that respondents continue to recognise whistleblowing as the key channel to report wrongdoing in Hong Kong. The willingness of respondents in Hong Kong to blow the whistle is surprising for two main reasons. For one, Hong Kong has a more reserved working culture (particularly compared with the US and the UK) and individuals are generally less willing to speak up, especially in relation to matters involving their managers or someone more senior than them.

Another reason is that there are still no formal or comprehensive protections for whistleblowers in Hong Kong.

Nevertheless, there have been some positive developments in this area since our 2020 survey. For example, the Hong Kong Stock Exchange upgraded the requirement for listed issuers to implement a whistleblowing policy from a Recommended Best Practice to a Code Provision in the Corporate Governance Code  (the Code). The Code Provision requires listed issuers to establish a whistleblowing policy and system for employees and those who deal with the listed issuer to raise concerns, in confidence and anonymously, with the audit committee (or a designated committee comprising a majority of independent non-executive directors) about possible improprieties or any matter related to the listed issuer. This Code Provision came into effect on 1 January 2022 and imposes a ‘comply or explain’ obligation on listed issuers.

However, there is currently no general obligation for non-listed companies in Hong Kong to put in place whistleblowing policies, nor any binding requirements as to what those policies might look like.

The fact that a speak-up culture is still prevalent in Hong Kong, particularly in contrast to jurisdictions that are more protective of whistleblowers (or even offer financial incentives), is therefore noteworthy.

Awareness of whistleblowing policies and procedures

51% of respondents in Hong Kong felt that the average employee would know that there is a whistleblowing procedure in place in their organisation and would therefore know what to do should an incident of wrongdoing arise. This is up from 45% in our 2020 survey results and is higher than the overall percentage of respondents across all five jurisdictions (47%).

72% of respondents in Hong Kong felt that managers in their organisation are adequately trained to handle incidents of whistleblowing, which is higher than the overall average across other jurisdictions (61%).

These results are positive for employers in Hong Kong, indicating that implementation of whistleblowing policies, and efforts to publicise them, is not going unnoticed by employees.  It is equally positive that these policies are not simply put in place and forgotten about, as respondents clearly feel that managers understand their company’s position on whistleblowing and would know how to deal with a report appropriately. There is, however, still some work to do in this area, given that almost half (49%) of the respondents did not think an average employee would know about their employer’s whistleblowing policy. Employers could increase awareness of their whistleblowing policies by holding regular training for all employees on the importance of speaking up, including details of the company’s whistleblowing policies and key points of contact.

Decreased trust in direct managers?

Publicising a company’s whistleblowing policies, and in particular any non-retaliation provisions, may also assist in rebuilding trust in managers as whistleblowing channels, which appears to have decreased since 2020. The number of Hong Kong respondents who would report wrongdoing to their direct line manager in the first instance has gone down from 45% in 2020 to 31% this year, and the number of respondents who would go directly to external authorities has increased (30% in 2023, up from 23% in 2020).

The fluctuation in these responses – and the fact that respondents are now just as likely to report wrongdoing to their line manager as they are to report externally to the authorities – suggests that whistleblowers in Hong Kong are becoming less trusting of their line managers, despite the high percentage of respondents who thought that managers in their organisation were adequately trained. The reluctance to report to their direct line manager is partly explained by half (52%) of Hong Kong respondents citing potential harm to their reputation or career prospects as a reason why an individual would not blow the whistle. The same number of respondents (52%) also agreed that a whistleblower might be prevented from making a report if their report would not remain anonymous. The apparent drop in respondents who would make a report to their line manager is therefore less of a reflection on the managers and more a question of the perceived impact on the whistleblowers.

Employers have a key role to play in addressing these concerns. By putting in place whistleblowing policies with robust non-retaliation provisions (and demonstrating their resolve that these protections will be enforced), employees can be reassured that making a whistleblowing report will not have any negative impact on their career prospects or lead to retaliatory treatment. For respondents in Hong Kong, anonymity is clearly a key concern. Employers should therefore consider how best to address this in their policies, whilst balancing the consideration that anonymous reporting often makes it difficult for companies to gather further information for an investigation.

Stephanie Chiu, Counsel and Head of Asia People & Reward, and Rachel Harris, Associate, People & Reward

Freshfields Bruckhaus Deringer

To access the full survey, please click here.