PDF Ebook Best Practices In Ethics Hotline
Virtually all organizations are vulnerable to fraud and misconduct in the workplace. By establishing a proactive approach and engaging stakeholders to promote an ethical workplace an organization can significantly limit liability and loss.
A successful strategic approach undertaken by many organizations is the implementation of an anonymous employee hotline. The Sarbanes-Oxley Act, enacted in 2002, requires pub licly traded corporations to provide a mechanism for reporting financial irregularities that enables employees who report information to remain anonymous. The positive results realized from this requisite has prompted not-for-profits, private organizations and government agencies to adopt similar reporting mechanisms for detecting and deterring organizational malfeasance. The Sarbanes-Oxley Act has even spurred a global shift as different cultures around the world recognize the value of such a mechanism for reporting unethical activities in the workplace.
The impact of fraud on U.S. businesses is costly to organizations, shareholders and consumers alike. According to the Association of Certified Fraud Examiners’ (ACFE) 2008 Report to the Nation on Occupational Fraud & Abuse, it is estimated that U.S. organizations will lose 7 percent of their annual revenues to fraud. Based on 2008 figures, that translates to $994 billion in fraud losses.
This paper discusses techniques for developing an effective ethics hotline program by examining three critical stages: planning prior to launch, communicating to stakeholders about the hotline and reacting to hotline tips.
The most effective hotlines offer 24-hour, 365-day access to a skilled interviewer. For the best results, and to simplify communication, organizations should provide a single mechanism for reporting all workplace issues. Reports should be disseminated quickly to designated parties. The hotline should also be promoted with educational materials directed to everyone in the organization, including employees and vendors. This helps maximize usage and supports an ethical environment.
Using a centralized reporting mechanism, information should be disseminated to the most appropri ate parties, which likely includes Human Resources, the Audit Committee of the Board of Directors, Legal and Loss Prevention, among others. Dual dissemination of complaints related to fraud acts as a system of checks and balances by ensuring that no single person is in possession of this highly sensi tive information. This protects the integrity of the reporting mechanism. The hotline program’s case management system should provide a centralized database for document ing the steps taken by the organization to investigate allegations reported via the hotline.
Once the data is available, an effective hotline program should provide management with a means for analyzing and managing the collected information. A robust reporting system offers managers the opportunity to not only view summary hotline information but also drill down to investigate specific details based on the user’s unique needs. And it should be accessible, easy-to-use and – through both graphical and numerical interfaces – simple to interpret and analyze.
Taking an analytical approach to hotline data allows an organization to measure trends, compare their results to norms for similar organizations, and identify areas for improvement. The results of a feature-rich reporting system should include the timely, consistent and practical delivery of reports to all stakeholders and provide the ability for an organization to make better business decisions.
Contents
Abstract
Introduction
Step One: Planning a Successful Hotline Program
- Getting started
Give employees, suppliers and others options for coming forward
Internal vs. External
Receiving tips: telephone interview, message service or Web form?
Should one hotline accept complaints about multiple issues?
Who within the organization should “own” the hotline?
Dissemination of information
Escalation criteria
Global operations
Data security and retention
Step Two: Communication – The Key to Hotline Effectiveness
- Objectives and strategies
Key messages
Delivery methods
Launching the program
A report could come from anywhere
Global communications
Keep the hotline “top-of-mind”
Step Three: After the Call
- Report dissemination
Ongoing communication with anonymous parties
For public companies
Investigation of allegations
Tracking the “treatment” of complaints
Management reports
Benchmarking
Conclusion
About the Authors
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