UK firms are neglecting early-warning signs of corporate wrongdoing, research by the Work Foundation finds.
It claims UK companies are neglecting vital safeguards that could prevent illegal or unethical business behaviour as happened in the WorldCom and Enron scandals.
The foundation's latest survey finds that many UK employers are failing to provide adequate internal 'whistleblowing' channels for their employees to raise concerns about bad behaviour - such as fraud or other financial malpractice - at work.
The survey of 281 organisations shows that even among firms with whistleblowing policies, many are suspicious of employees contacting prescribed external regulators with their concerns - although this is expressly protected by the law and encouraged by statutory bodies, such as the Financial Services Authority.
Only one in three (32 per cent) private sector firms have introduced formal whistleblowing policies, compared to three-quarters (75 per cent) of firms in the public or voluntary sectors.
Theo Blackwell, chief policy specialist at the Work Foundation, said: "We would like to see the DTI taking the lead in promoting whistleblowing policies as an effective tool for corporate governance. As the recent US scandals reveal, employees can play a vital role in upholding good corporate governance, highlighting potential problems and maintaining organisational ethics."