4 Challenges to Creating an Effective Whistleblowing Policy and How to Overcome Them

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Mustafa Yusuf-Adebola, CFE, ACCA
Risk Consultant

In reviewing organizations’ whistleblowing platforms, I have noticed two features that consistently affect a program’s success. One, reporters have no trust in the system due to fear of victimization or intimidation when/if the veil of anonymity is removed. And, two, reporters are not encouraged to speak out because there are no (appearances of) far-reaching actions after investigations are conducted. Consequently, there is less motivation to report wrongdoing.

Trust is the bedrock of any whistleblowing platform; as such, potential reporters are comforted by the assurance that cases will be treated with the utmost confidentiality. For instance, an employee of an organization once revealed to me that he would blow the whistle only after he had submitted his resignation letter because the subjects involved in the alleged fraud were top executives. According to him, this was his own way of "rocking the ship" before leaving.

To encourage reporting through an effective whistleblowing policy, a few challenges I have noted are:

1. Low awareness: Organizations need to appreciate the importance of publicizing their whistleblowing policies and the reporting channels to everyone (including third parties).
2. Poor infrastructure: Create and enable appropriate channels (emails, phone lines, suggestion boxes or internet links) to cater for the preference of the reporter. For example, some organizations have dead web portal links and nonfunctioning phone lines used for whistleblowing. One company published a reporting phone number in its annual report that was entirely different from the website’s listing. These are easy ways to show potential reporters that you want to hear from them.                                                            
3. No follow-up messages: A program should include assignments of case numbers for each report to give the reporter assurances of activities taken after they have made a claim. In certain instances, a case could be investigated for a long period of time and the reporter should be routinely informed of updates.
4. Ignoring data analytics: Data analytics is a very useful tool in proactively responding to fraud. Collating and recording all relevant data for established and unestablished cases on the whistleblowing platform can help anti-fraud professionals proactively address fraud indicators, assist in updating in-house training courses, and help in increasing employees' fraud awareness and reviewing of company policies.

Ultimately, the support and actions of top management will go a long way to provide a good framework for preventing and detecting fraud through whistleblowing programs.

NAVEX Global’s 2014 Hotline Benchmark Report Marks Notable Changes in the Way Employees Use Company Hotlines/Helplines

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Carrie Penman, Chief Compliance Office and Senior Vice President of Advisory Services Division
NAVEX Global

For the last five years, NAVEX Global has been proud to provide the industry’s best and most statistically accurate hotline benchmarking data. Our annual reports are a trusted resource for ethics and compliance officers, executives and boards of directors who have program oversight responsibilities.

Now that 2013 has come to a close, we have been hard at work calculating the 2014 Hotline Benchmark Report for your use in evaluating the effectiveness of your hotline reporting system. While we are wrapping up the full report, we wanted to provide a preview of three notable statistics we found in this year’s data. 

1. There has been a sustained increase in overall Report Volume

While Report Volume remained steady for nearly a decade, we have seen a sustained and significant increase in Report Volume per 100 employees over the past three years. In our full report, we offer several reasons why this may be occurring.

2. An ever-increasing number of Repeat Reporters continue to provide valuable information

The number of Repeat Reporters has more than doubled in the last five years with a 4 percent increase in Repeat Reporters making reports in 2013. Most surprising about this statistic is that reports submitted by Repeat Reporters are being substantiated at a rate 4 percent higher than First Time Reporters. 

3. Diversity, workplace respect and human resource issues rise to highest level in five years

While diversity, workplace respect and human resources type issues have always been the leading category of issues reported, this year the percentage of these reports has risen to its highest level in five years — 73 percent of all reports made. And while we did see a 4 percent increase in these reports from last year, we did not see a change or drop in the substantiation rate from last year. 

The infographic below displays all three trends visually. You can dig even deeper into the details of the 2014 Hotline Benchmark Report by attending the upcoming webinar, Benchmarking Your Hotline: How Does Your Data Measure Up Against NAVEX Global’s 2014 Benchmarks? on March 13 at 10 a.m. PST/1 p.m. EST. This is your chance to hear from experienced ethics officers about how to best use the report’s data to ensure you are getting the most from your internal reporting systems. Register today.