Whistleblower hotlines are the most effective method of uncovering unethical behaviour in an organization. In fact, the Association of Certified Fraud Examiners (ACFE) 2014 Global Fraud Study reports1 42 percent of frauds are uncovered by whistleblowers—more than any other method by far. As an added bonus, such programs come with a very low price tag—making them affordable to implement. Yet, while many private business owners recognize these benefits and have set up whistleblower programs in one way or another, few are experiencing the full range of benefits.
If your company’s whistleblower hotline isn’t generating the results you’d like—say, it’s not receiving any calls at all—there are some things you can do to ensure a higher ROI. But first, you need to get to the root of the problem, by asking a few in-depth questions.
One of the top reasons employees don’t come forward to report internal wrongdoing is because they don’t believe management will do anything about it. Setting the tone from the top is a sure-fire way to earn your employees’ trust and let them know management is serious about addressing any wrongdoing that is uncovered. One of the most effective ways to achieve this is by establishing formal processes and procedures—regarding both the investigation of whistleblower reports and the remediation of unethical acts.
Without the right environment, processes and systems in place, your team members may be more inclined to report through another channel—such as the media, the internet or regulatory bodies—which will undoubtedly cause more trouble for you and your company down the road.
That’s why it’s important to ensure whistleblower hotlines are anonymous—and that your company fosters a “speak up environment”. The Canadian Standards Association (CSA) recently issued a guideline2 (sponsored by Grant Thornton) that outlines how an effective whistleblower program should be structured—including planning considerations, potential outcomes and implementation tips—to make sure whistleblowers will not be punished for their actions.
A lot of the time, whistleblower hotlines aren’t used—or are used incorrectly—simply because the merits of the program weren’t effectively communicated to the team. Whether you’re rolling out a new program—or onboarding new employees—it’s important to clearly explain the purpose of the program, what it entails and why it holds a position of high importance within the company.
Most people don’t report wrongdoing within their company for one of two reasons: they don’t trust that management will do anything about it or they believe the consequences to them far outweigh the value of trying to do the right thing. If you establish a whistleblower program that addresses these two deterrents, you will likely start getting calls alerting you to activities you might otherwise never uncover. This will allow your organization to not only minimize losses resulting from fraud, but also enable you to respond to internal unethical acts swiftly—before they damage your company’s reputation, as well.
1 Association of Certified Fraud Examiners. Report to the Nations on Occupational Fraud and Abuse. 2016.
2 CSA Group. Whistleblowing Systems: A Guide. Register to view.
