Whistleblowing, a few calls do not mean your companies safe

Having a whistleblowing hotline does not automatically prevent fraud from occurring. A company should maintain its effectiveness from time to time, which is not as easy as it looks.

Many companies incorrectly assume that everything is going well and there are no illegal activities occurring based on a few calls that they received. Well, that is not necessarily the case. A lack of calls could indicate that the system is not working effectively, which is caused by subtle situations that could be:

• The employees do not trust the system. In many cases, the individuals who blow the whistle often have to pay the price for their courage to speak up about the wrongdoings. They suffer from isolation, being ostracized, harassment, and other retaliation. The adverse aftermaths occur because the organizations do not support the building of a healthy internal whistleblowing system. PricewaterhouseCoopers (PwC) Malaysia’s Global Economic Crime Survey 2016 reported that too often employees tell that they do not feel supported or empowered to report issues. Hence, the logical consequence is the distrust marked by the reluctance to report.

• Lack of effective communication
  The lack of calls could have happened because the companies do not promote the whistleblowing hotline effectively. It often happens that the companies launch the system with a big announcement, but then let it fade away as time goes by. The stakeholders most probably forget, or even have no idea what exactly the whistleblowing system is, how they will be protected, how they will be kept updated about their report progress, or how to report the concern.

In order to know whether your whistleblowing system is working effectively, The Deloitte Forensic Center suggests that an organization should periodically assess the hotline effectiveness by running any one of the following methods:

• Anonymous employee surveys
• Focus group
• Benchmarking
• Feedback from the reporter
• Employee interview
• Exit interviews
• Incident logs

It is also important for companies to include information about the effectiveness of their whistleblowing system in their annual report.