Corporate Governance
Why Implement an Ethics Helpline?
Fraud reporting mechanisms are a critical component of an effective fraud prevention and detection system.
Organizations should implement whistleblower helplines to receive tips from both internal and external sources. Such reporting mechanisms should allow anonymity and confidentiality, and employees should be encouraged to report suspicious activity without fear of reprisal. Employee education is the foundation of preventing and detecting occupational fraud. Staff members are an organization’s top fraud detection method; employees must be trained in what constitutes fraud, how it hurts everyone in the company and how to report any questionable activity.
ACFE data shows not only that most frauds are detected by tips, but also that organizations that have anti-fraud training for employees and managers experience lower fraud losses. However, non-company sources - customers, vendors, competitors and acquaintances - provided at least 34% of fraud tips. This suggests that fraud reporting policies and programs should be publicized not only to employees, but also to customers, vendors and other external stakeholders.
While tips have consistently been the most common way to detect fraud, the impact of tips is, if anything, understated by the fact that so many organizations fail to implement fraud reporting systems.
Such systems enable employees to anonymously report fraud or misconduct by phone or through a web-based portal. The ability to report fraud anonymously is key because employees often fear making reports due to the threat of retaliation from superiors or negative reactions from their peers.
The presence of a fraud helpline enhances fraud detection efforts and foster more tips. The better an organization is at collecting and responding to fraud tips, the better it should be at detecting fraud and limiting losses.
Source: ACFE Report to the Nation 2010
Anti-fraud Program
White-collar crimes cost the United States more than $300 billion annually according to the FBI. In Canada, it is estimated Canadians pay increased taxes and prices for consumer goods amounting to as much as $20 billion a year as a result of white-collar crime. WhistleBlower Security Inc. has developed anti-fraud programs to help businesses and organizations to prevent, deter and detect fraudulent activity.
WhistleBlower Program
A whistleblower helpline is probably the easiest and least expensive means available to improve corporate governance. Waste, fraud and the abuse of authority can all be combated by having an independent reporting mechanism that uses employees to report malfeasance. The procedures and practices for complaints from employees, customers or investors regarding questionable accounting or auditing matters are a necessity for every organization - and an outright requirement for many. Public companies are required by Section 301(4) of the Sarbanes Oxley Act in US and Multi-Lateral Instrument 52-110 in Canada to have a whistleblower system. However, these systems are also valuable for private companies.
Our whistleblower program is designed to alert those in charge to take action before any damage is done to minimize corporate risk and shelter executives from potential litigation.
Workplace Ethics Program
Ethical guidelines benefit organizations by steering employees away from ethical risk-taking and into more productive and appropriate kinds of risk-taking. The list of potential benefits linked to an effective ethics program includes the following:
- Recruiting and retaining top-quality people
- Fostering a more satisfying and productive working environment
- Building and sustaining your business' reputation within the communities in which you operate
- Maintaining the trust of members to ensure continued self-regulation
- Legitimizing open discussion of ethical issues
- Providing ethical guidance and resources for employees prior to making difficult decisions
- Aligning the work efforts of staff with the business' broader mission and vision
Our workplace ethics program is combined with workplace ethics consulting, that assists you in designing and implementing an ethics program that is right for your organization.
Risk Management Program
By integrating risk management with compliance covering laws and regulations, social standards and corporate ethics, our risk management consulting team ensures the fairness and transparency of your management system.
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