We recently published an article in National Defense Magazine called "Whistleblower Hotlines: A Valuable Tool". An effective ethics reporting tool, implemented as part of an ethics and compliance program, can not only help an organization detect and resolve potential misconduct issues, but it can also help support a culture of integrity and responsibility within the workplace. Misconduct in the workplace can be devastating. The Association of Certified Fraud Examiners’ “2016 Report to the Nations” estimates that, on average, organizations lose 5 percent of revenue per year due to fraud and other misconduct. Many organizations have implemented active and deliberate misconduct-detection processes. “Active” means that a person, or an internal control method, has been put in place and is instrumental in looking for fraud and other misconduct. Compare that to “passive” detection, in which the organization learns of unethical activity only after the fact or by accident.
Considering implementing a whistleblower hotline? Effective compliance programs should have an ethics reporting hotline. It's an effective means of communication between employees and management, allowing employees to bring forward ethical concerns to the company rather than reporting externally to media, or other agencies. A recent article explains that confidence in using a reporting hotline is a result of both the employee and company not being known to each other.
A weak link could spell disaster.
Many have felt this way and may feel there's no way out.
Every post you see regarding ethics hotlines or whistleblower hotlines, revolves around setting up processes in place to allow employees to anonymously report on wrongdoing in the company. We see reports of securities violations, bullying and harassment, occupational fraud and abuse, money laundering... the list goes on. Many organizations have adopted hotlines to allow employees and stakeholders to report on these instances of misconduct.
Many companies have already implemented an ethics reporting program. Others might be thinking about one for some time in the future. And still others may not have even considered it. A common belief is that organizations think these programs are too expensive, or that they just don’t need one. With what seems to be a continued onslaught of corporate scandals in the media, ensuring that existing compliance programs are working correctly, or that newly implemented programs get off to a stellar start, to not have an ethics reporting program in place could be detrimental.