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Whistleblowing Hotlines Protect Against Fraud

Whistleblowing Hotlines Protect Against Fraud

Implement a Whistleblower Hotline

No organization wants to deal with effects of an exposure to an unexpected liability or unwelcome scrutiny. That vulnerability is more significant with the increase in ethical violations and occupational fraud stimulated by a  tough economy. With resources being stretched and revenues shrinking, the losses from any ethical violation is just too great to ignore.

Fraud costs organizations more when it’s ignored. No organization is immune to fraudulent or unethical behaviour, and no organization can afford the costly consequences. And beyond the direct financial impact, organizations can face regulatory violations or noncompliance issues. Public organizations face penalties for failing to meet SEC obligations, and non-profit entities could face the loss of government funding.

There are plenty of reasons for implementing an anonymous, ethics reporting hotline. Whistleblowers want to know where to go, how to avoid supervisors, and that they can remain anonymous. An anonymous hotline removes many of the obstacles to reporting inappropriate behaviour and gives employees, suppliers, and vendors the ability to raise genuine concerns about illegal or unethical behaviour. As well, they reduce the risk of individuals going elsewhere with their concerns, potentially damaging an organization’s reputation and causing further financial harm.

A whistleblower hotline should:

  • Encourage - employees should feel safe to speak up about ethical and legal violations
  • Be accessible  - to the entire organization, as well as be available to vendors and suppliers if needed
  • Meet regulatory requirements – specifically applicable to publicly traded organizations locally and globally
  • Be anonymous - have an option to provide anonymity to anyone wishing to report concerns
  • Resolve - enable management to take action immediately to resolve a problem
  • Minimize - the organization’s exposure to damage if reporters go public with their concerns
  • Be cost-effective - a whistleblower program should not break the bank
  • Available 24/7/365 - employees might be globally located and will report at anytime of the day or night
  • Provide confidence - let employees and stakeholders know the organization is serious about speaking up

Organizations that have implemented effective ethics and compliance programs are serious about encouraging strong ethical cultures and will have employees who feel safer when they speak up about ethical concerns.

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photo Amanda Nieweler
About the Author
Amanda writes for WhistleBlower Security about ethics, compliance, workplace culture, and whistleblower hotlines. Amanda brings her nearly two decades of risk and compliance experience to the WBS blog where she is dedicated to helping people and companies promote speak-up cultures.