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Jan 11, 2007

Whistleblower hotlines work!

An excellent 36-page report by The Network ,Inc., a company that runs whistleblower services, and CSO Executive Council gives the results of their statistical analysis of 180,000 whistleblower hotline calls from 550 organizations over 4 years. That's quite a sample on a seldom-reported topic. Here are a few salient points from the 2006 Corporate Governance and Compliance Hotline Benchmarking Report - a Comprehensive Examination of Organizational Hotline Activity:

- 65% of calls were 'serious enough to warrant investigation' - that's management-speak for "Oh shit" - with nearly half resulting in 'corrective action';

- 71% of callers gave information that was 'news to management'. 71%! Managers I have known think they are well-connected to the workforce. "I'm all ears", they say. "My door is always open" or "I Manage By Walking About." Yeah, right;

- just over half of the callers prefer anonymity, with callers alleging corruption/fraud (10% of calls) less likely to remain anonymous than those reporting other things such as HR issues, policy/code violation, environment/health and safety concerns etc. In my experience, managers considering whistleblower policies seem overly concerned about anonymity, claiming that it encourages frivolous or scurrilous calls, and that they won't be able to investigate calls made anonymously. More poppycock! It seems to me they need to focus more on addressing the content of the calls than on the callers;

- What I would categorise as "blue collar workers" are more likely to use whistleblower lines than "white collar workers", with retail and transportation/comms/utilities employees leading the way.

Does your organization have a whistleblowers' policy, with or without a hotline? Was its introduciton driven by SOX, by Audit, as a result of a particular incident or for some other reason? Who answers the calls/emails and how do they handle them? How useful is the information obtained in relation to the effort/cost involved? If you could start over, how would you set it up? Comments and further links are very welcome. I'm eager to learn more.