What are the most common complaints?

Corporatedisclosures and

financials

O�eringfraud

Manipulation

More people are reporting misconduct according to the SEC, and the reasons for reporting haven’t changed.

Sources: SEC Annual Report on the Dodd-Frank Whistleblower Program

A secure and confidential hotline is not only an important way to establish a culture of trust, accountability and transparency among your employees, but a key mechanism for: (1) identifying issues before they escalate; (2) making changes to your program to minimize the likelihood of a recurrence; and, in some cases, (3) proactively disclosing the issue to the government. After all, self-disclosure, cooperation and an e�ective compliance program have historically earned companies more leniency in the event of a breakdown.

On a broader level, a hotline can help your organization minimize the long-term financial and reputational impact that misconduct has on your organization. Here’s a quick overview of hotline requirements, along with the trends, best practices and potential barriers to an e�ective hotline.

THE BUSINESS CASE FOR WHISTLEBLOWING

NOW TRENDING: #WHISTLEBLOWING

KEY FEDERAL REQUIREMENTS

Federal Sentencing GuidelinesCompanies must establish a system for anonymous or confidential reporting of misconduct without fear of retaliation, tell employees about the system, and periodically assess the compliance program.

Dodd-Frank Wall Street Reform and Consumer Protection Act With a focus on securities laws’ violations, employers are prohibited from discharging, demoting, suspending, threatening, harassing or discriminating against a whistleblower.

Sarbanes-Oxley ActAll publicly traded companies must establish a procedure for employees to file a complaint and ensure their confidentiality.

Occupational Health and Safety Act (OSHA)Organizations must display a hotline poster and have a reporting channel available to report workplace hazards, illness or injuries.

Foreign Corrupt Practices Act (FCPA)The DOJ-SEC FCPA Resource Guide outlines the need for a mechanism to confidentially report suspected misconduct without fear of reprisal.

Highly Regulated Industries

WHY WHISTLEBLOWERS TURN TO OUTSIDE FOR HELP

While 92 percent of whistleblowers turned to someone inside the company when they first reported misconduct, they have good reason to report outside of the company. One in five people who report misconduct tell someone outside the company, and here’s why:

THE MOST (AND LEAST) COMMON REPORTING CHANNELS

Knowing where employees turn to report misconduct and fraud is a crucial component of running an e�ective whistleblowing program. At some point in the reporting process, employees have turned to these channels:

3 INHIBITORS FOR REPORTING MISCONDUCT

Employees don’t know about their rights.

Companies often criminalize whistleblowing and punish employees who report misconduct, which is illegal.

The federal government is slow and reluctant to regulate and reform corruption revealed by whistleblowers.

HOW COMPANIES ARE HELPING EMPLOYEES REPORT MISCONDUCT

Educating employees about laws that protect them as whistleblowers

Encouraging supervisors and employees to report problems to the ethics and compliance department even if they’ve dealt with them on their own

Creating a work environment where employees feel empowered

Designing programs to address misconduct by managers and executives, since they’re guilty of more misconduct than non-management employees according to widespread data

Source: National Business Ethics Survey

Source: National Business Ethics Survey

Managing the Whistleblowing ChallengeA Close Look at the Latest Reporting Trends

I was retaliated against after I made my first report inside the company 40%I was afraid I would lose my job if I did not get outside assistance 40%I thought that keeping quiet would cause possible harm to people or the environment 39%

I thought keeping quiet would get my company into big trouble 29%I was afraid for my safety 22%I had the potential to be given a substantial monetary reward 14%

My company acted on my report, but I was dissatisfied 36%My company did not act on my report 29%

I did not trust anyone in my company 45%The problem was ongoing and I thought someone from outside could help stop it 50%

Gov

ernm

ent

cont

ract

ors

Health

care Finance Energ

y & utilities Mining

Manufacturin

g

3,001complaints

2012

3,238complaints

2013

82%

52%32%

16% 15% 13% 11% 9%

Supervisor

Highermanagement

Humanresources

HotlineEthicso�cer

Someoneoutside thecompany,

excluding agovernment or

regulatoryauthority

Legal A governmentor regulatory

authority

16.2%17.1%17.2%

As rules and regulations are put into action, three issues arise that prevent employees from filing complaints, according to the Government Accountability Project.

Source: Government Accountability Project

Organizations are empowering employees by:

Source: Ethics Resource Center via National Business Ethics Survey

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