Whistleblower Policy & Document Retention Policy standards

This post was written by Heidi Neff Christianson, a Board Member of the Charities Review Council and a Partner at Moore, Costello & Hart, P.L.L.P.

The Charities Review Council decided to add standards regarding Whistleblower and Document Retention Policies mainly because the IRS is now asking tax exempt organizations to report whether they have adopted the policies on the revised 2008 IRS form 990. The IRS got the idea from the Sarbanes-Oxley Act of 2002 - a federal law passed in reaction to major corporate scandals. It's important to note that Sarbanes-Oxley does not require that exempt organizations have these policies. Sarbanes-Oxley is relevant to tax exempt organizations because it establishes penalties for retaliation against an employee for reporting (in good faith) suspected wrongdoing, and for destruction of documents that an organization should know will be relevant in a government investigation or litigation.

In my practice I have seen more than one nonprofit suffer the consequences of a workplace culture that suppressed employees from raising questions regarding bad behavior. I happen to like the sample policies found on the Charities Review Council website (and not just because I helped to write them). I like them because they describe simple processes to be followed in sticky situations - and having a process is better than nothing. That said, I highly doubt that the existence of a Whistleblower policy, without more, would have ever prevented the bad behavior. I actually believe that if the culture of those organizations had encouraged questioning leaders, the behavior would have stopped despite the lack of any policy.

What do you think? Do policies influence behavior? Or are these policies just two more pieces of paper taking up room on the old policy shelf?

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