Australia’s corporate regulator wants to hear from the public about how companies can better protect whistleblowers.

New laws will require companies to have a whistleblower policy in place for their employees by New Year’s Day, revealing how they will support them and handle their complaints.

The Australian Securities and Investment Commission, which was heavily criticised during the banking royal commission for being too soft, is calling for public submissions about the new laws.

“Companies need to have a robust and clear whistleblower policy to effectively deal with whistleblower disclosures,” Commissioner John Price said. “Transparent whistleblower policies are essential to good risk management and corporate governance. They help uncover wrongdoing that may not otherwise be detected.”

The United States has a highly successful whistleblowing program in which a whistleblower can get up to 30 per cent of the fines paid as a reward.

The system has raked in more than $2 billion for the US government and paid out more than $300 million to whistleblowers since 2011.

Australia does not have a reward system – but it does have a convoluted set of steps corporate whistleblowers must follow if they want to avoid being hounded through the courts.

Alternatively, misconduct can be directly reported to ASIC. But the regulator was heavily criticised for being too soft on companies where corporate misconduct was found.

“When banks have disclosed, or ASIC has otherwise learnt of, misconduct, ASIC has almost always sought to negotiate what will be done in response,” the royal commission found.

ASIC is also looking for feedback on exempting public companies that are small not-for-profits or charities from being required to have a whistleblower policy.

“We are seeking views on whether this would minimise the risk of a disproportionate regulatory burden on these small not-for-profits and charities,” Price said.

The public consultation closes on September 18.

Angus Livingston, AAP National Economics Writer