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2017 Scott Grant

Why should Whistleblowing mechanisms be externalised? 

Scott Grant

Managing Director

Granite Point Investigations & Ethics Consultants Ltd.

Aberdeen, Scotland 

 

Organisations have been externalising their whistleblowing arrangements through third party providers for many years now.

Some have done so, so as to conform with legislative requirements.

Some have done so because their peers have done so.

Some have done so because they required to tick a box in their compliance handbook and in an attempt to present an outward appearance of ethical transparency and excellence.

Some have done so for all of the aforementioned reasons.

 

Some have done so (believe it or not), because they recognise that their employees are their most valuable assets and they want to hear of their concerns and of possible misconduct within the organisation. These same organisations will in all likelihood realise that hotlines are still the most effective mechanisms for detecting wrongdoing and by providing as many reporting mechanisms to their employees as possible, they increase the chances of learning things they might not have otherwise.  

 

Having been involved directly with whistleblowers and across whistleblowing for over 20 years now, I can say that the organisation who implements the services of the right provider and for the latter reason given above, will benefit more from the service than others.

 

And one key point to make here – having personally interviewed many whistleblowers and potential whistleblowers – an organisation’s employees are quick to realise the reason why an external whistleblowing hotline has been implemented across their company and this will impact the chances of them using it.

 

Why externalize? 

 

Organisations who implement the services of an external whistleblowing service provider now have options in the market place. This can only be a good thing.

 

But why externalise when you have a ‘perfectly good’ internal system in place already?

 

There are many reasons, but here are just a few key examples:

 

  • Enhance and build employee trust

Internal reporting mechanisms can often fail or be poorly used due to lack of confidence in reporting the matter internally. They may also have limited accessibility and hours of availability. The fear of retaliation when using an internal mechanism is also more prominent. Employees can highlight their concerns and report misconduct to an external provider in confidence and anonymously (legislation permitting).

 

  • Tips/Whistleblowing is the most common detection method of fraud

The Association of Certified Fraud Examiners report of 2016, again highlighted the above fact from it’s data, more than doubling the success rate of the next best detection method of Internal Audit. Doesn’t it make sense to utilise a method which has been proven to be the most successful internationally for many years ?

 
  • Increased number of employee reports being received

Statistics demonstrate that where an external whistleblowing hotline is in place, reports on wrongdoing within organisations increase.

 

  • The experience and expertise is available

You wouldn’t ask your IT Manager to draft a complex Commercial Legal Contract (unless they were also a qualified lawyer of course!), so why not do your research and utilise the experience and expertise of an external whistleblowing hotline provider ? You should receive detailed and consistent reports from your provider, allowing you to make prompt decisions as to what action to take.

 

  • Genuinely reduce your costs

Yes, you read that right. Organisations in the main will find that it is far more cost effective to outsource their whistleblowing hotline, rather than devote significant resources to an internal solution, which still might only be able to operate within office hours, Monday to Friday and without any language capabilities.

 

  • Identify trends and obtain key business information across your organisation

Some providers will be able to provide you with Management Information Reports and detailed Data Analytics on the information they receive on your behalf. These can assist with identifying ongoing trends and issues in specific geographical areas or sectors of the business, allowing you to take immediate and decisive action.

 
  • In response to new anti-bribery and corruption legislation and regulation

Although not a legal requirement to externalise whistleblowing, many organisations considered an external provider to be an excellent option when the UK Bribery Act came into effect. The financial and insurance sector also responded in more recent times when the new FCA Whistleblowing Rules were implemented. Sapin II legislation in France is having a huge impact on larger organisations currently and will impact smaller organisations too, as of the beginning of 2018.

 

  • A 24/7, 365 days a year, secure and global coverage service offering for your organisation

A given for any self-respecting whistleblowing hotline provider. Some can offer free-to-use multiple reporting mechanisms available in over 200 different languages, including international toll free numbers, web platforms and in some cases a mobile app.

 

  • Your employees ARE your greatest assets

Listen to them and give them the opportunities to be heard.

 

How to do it

The reasons why you should externalise your whistleblowing hotline arrangements are fairly straightforward. How to do it is not necessarily so easy, but with the right provider and the correct approach it’s not impossible.

 

  • The tone from the top

 

We’ve all heard this one before and thanks to a certain CEO of a large bank, whose recent attempts to identify a whistleblower contradicted his own words in their Code of Conduct document, some employees within their own organisation may struggle to believe the narrative emanating from their respective CEOs.

 

However, the tone from the top with regards to whistleblowing internally and to an external provider is still vitally important. Get this right and your employees will use the service when applicable. Get it wrong and you’ll see poor returns.

 

The CEO and other senior leadership figures have to ‘buy-in’ to the process and have to demonstrate how they do so, not just at the launch of the service but throughout the time the service is in place. They need to demonstrate that they want to listen to their employees and encourage use of the service, for the right reasons, of course.

 

The leadership must also try to ensure that mid-level managers are all supportive of and encourage use of the service. After all, they deal with the organisation’s employees on a day-to-day basis.

 

There are different ways in which to demonstrate the tone from the top. Carrying out business in a transparent and ethical manner is always a good start and where there have been any breaches or wrongdoing in this area, it’s vital that the organisation deal with it in a fit, proper and transparent way. If the organisation demonstrates that it will take the appropriate action against any employee from the CEO downwards – this sends the right message to all.

 

The CEO and other leadership figures can also regularly speak about how successful the service has been throughout the year. Remember, not every report an external whistleblowing hotline receives is about misconduct and fraud ! Not at all. They can receive reports on any subject matter chosen by the organisation.

 

The organisation can highlight instances where reports have been received, which have resulted in changes or improvements made throughout the organisation. This also demonstrates that the leadership not only listens BUT also acts.

 

Fraud and misconduct can be highlighted too, as well as the actions taken. The precise details may have to remain absent, but there’s nothing wrong with advising the organisation’s employees that misconduct (perhaps giving a value or area of the business in which it occurred if possible) was highlighted through the external whistleblowing hotline and that action was taken which resulted in dismissals/authorities being informed.

 

In this instance, not only does the organisation demonstrate that they listen and are willing to take action – they also recognise that by providing this feedback they are likely to encourage more employees to use the service. Demonstrating that they will take the appropriate action to instances of fraud and misconduct should also act as a deterrent to such activities!

 

  • Implement the service properly – first time       
 

I’ve known of an organisation who engaged the services of an external whistleblowing hotline provider and didn’t implement the service properly. In fact, they didn’t bother to advise their employees of the existence of the service at all. It should come as no surprise that during the 3-year contract, not one single report was received.

 

Organisations should:

 

  • Let all employees know that an external whistleblowing hotline will be available to them in advance of the go-live date.

  • Explain how the service operates and how it works – providing links to the external provider’s own website.
  • Explain that the service is in addition to existing internal mechanisms, which can still be used.
  • Link the service to an updated and appropriate whistleblowing policy.
  • Advise that training on how to use the service will also be provided.
  • Build this training into new employee induction days.
  • Make the commitment to providing feedback to the employee who contacted the external provider in the first place.
  • Explain why they are providing an external whistleblowing hotline too !!

 

On the go-live date, make a big deal of it! Demonstrate how important this is to the organisation as a whole.

 

A good provider will also be able to assist with the implementation and suggest ways to increase awareness throughout the organisation.

 

Some organisations will launch an external whistleblowing hotline so as to coincide with a new Code of Conduct or Code of Ethics document, but by doing so, they may lose the best opportunity to create awareness of the service from the outset – best to launch it on its own merits.

 

  • Maintaining awareness after the launch  

 

A good provider will assist you with this as part of the service, but here are a few suggestions –

 

As mentioned previously – highlight changes and improvements made as a result of employees contacting the external provider.

 

Provide employees with regular updates on the service through company newsletters, perhaps also providing statistics as to how many contacts were made in a month or quarter. Providing statistics on feedback is also a good idea – there’s nothing more frustrating for someone who has made the big decision and taken the time to contact the external whistleblowing hotline only for them to hear no feedback whatsoever. It’s unlikely that person will ever use the service again.

 

Provide employees with contact cards with the external provider’s contact details and regularly refresh posters (with similar content) on display around the offices.

 

Every organisation who implements an external whistleblowing hotline should want it to be a success and a useful tool for their employees and the organisation itself.

 

However, for the service to be a success there are several things an organisation should do. Here are a few examples:

 

  • Ensure clarity with what should and should not be reported through the external whistleblowing hotline

 

This is an error which is easily made when the service is rolled out for the first time. It’s vitally important for the organisation during the time of pre-launch awareness to highlight what should and should not be reported to the external whistleblowing hotline.

 

A common topic in this regard is an organisation’s grievance procedure. Most, if not all, organisations will, quite rightly, want their employees to follow existing and well thought-out internal procedures. However, and in my experience, unless this policy is highlighted during the awareness and implementation stages of the external whistleblowing hotline, employees often use the service for this very reason.

 

  • Maintain awareness
 

Unless you have a process in place to ensure you maintain awareness across the organisation, it can be quite easy to let things slip. After a period of time, you may find that whistleblowing hotline articles appear less frequently in the newsletters or that the same poster has been in the same location for years.

 

I’m not saying that there should be a daily reminder, but maintaining awareness is key for the success of the service and for it to be a success for the organisation.

 

A good provider should assist you throughout the length of time you are with them.

 

  • Provide feedback to your employees

 

Yes, I’ve mentioned this before, but it is that important ! In the vast majority of occasions detailed feedback will not always be possible, but some type of feedback will be. Employees want to know that their concerns or information has or will be acted upon.

 

You know how frustrated you get at the airport when your flight is delayed and you receive no information or feedback from the airline or airport – when all you are looking for is an explanation. Imagine that ten-fold, when you have taken the big decision to contact the external whistleblowing hotline !

 

A good provider can assist with providing the feedback securely and confidentially.

 

And finally:

 

  • Pick the right provider for your organisation
 

This is perhaps the most important decision if you want to achieve a successful external whistleblowing hotline service for your employees and organisation.

 

Some organisations will base their decision on who may well be the biggest provider in the industry.

 

Some will base their decision on who may be the least expensive provider.

 

Some will base their decision on additional available services.

 

Some will base their decision on irrelevant statistics.

 

Some will simply copy their peers without really looking into what each provider offers.

 

What organisations should be basing their decision on from the outset is – who is the best provider for our employees and why ?

 

Organisations should want their employees to feel comfortable and at ease when they provide their information to the external whistleblowing hotline provider.

 

Organisations should want their provider to engage in conversation, not interrogation of their employees.

 

Organisations should consider relevant ‘employee/whistleblower’ related statistics. For example, a provider who has industry-leading figures for employees who provide their contact details is obviously doing something right when speaking to your employees.

 

Obtaining these contact details not only allows the provision of all important feedback, it also allows the organisation to ask additional questions through the provider, which would not have been possible without the contact details.

 

In other words, select a provider who offers the best service possible, but ultimately who puts the whistleblower first.

 

Scott Grant

Managing Director

Granite Point Investigations & Ethics Consultants Ltd

 

June 2017

2017 Scott Grant

Scott Grant is the Managing Director of Granite Point Investigations & Ethics Consultants Ltd. He is an accredited fraud and financial investigator who also specialises in ethics and in particular whistleblowing. Scott has an enviable track-record and varied experience in the whistleblowing services sector. He is currently assisting organisations with externalising their whistleblowing hotline arrangements across Europe, but France in particular given the recent implementation of the SAPIN II legislation. Scott also consults for Europe’s leading and longest-established external whistleblowing hotline provider, Expolink.

 




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