No Need to Be Afraid! (They Don’t Bite)
Many companies have already implemented an ethics reporting program.
Others might be thinking about one for some time in the future.
And still others may not have even considered it.
A common misconception is that organizations think these programs are too expensive, or that they just don’t need one. With what seems to be a continued onslaught of corporate scandals in the media, ensuring that existing compliance programs are working correctly, or that newly implemented programs get off to a stellar start, to not have an ethics reporting program in place could be detrimental.
Here are four misconceptions about a whistleblower program.
Wa-ay too expensive! We’ll never be able to afford one with a tight budget:
A whistleblower program need not break the bank. You’ve spent many, many hours to build your business to where it is today. You’ve invested the time and energy in hiring and training the right employees to help move your business even farther. Can you afford not to have a program in place? To operate on the idea that nothing unethical has ever happened in your organization (or never will) is probably a false notion. What if an employee felt that there was nowhere to go to report an alleged unethical wrongdoing, so instead, went outside the organization? The time and cost involved in dealing with that type of regulatory publicity and backlash is most certainly more than the cost of implementing a program to begin with.
We’re a private company – we don’t need one:
Yes it’s true that to meet the US requirements of Sarbanes Oxley and the Canadian Multi-Lateral Instrument 52-110, public companies are mandated to have a whistleblower policy and procedure in place. But this doesn’t mean that private companies shouldn’t adopt a program themselves. Small business especially suffer proportionately more damage from fraud than public organizations do. A privately held company can benefit from adopting some of the best practices that have been developed by implementing a whistleblower program and complying with either of the two Acts. If a private company voluntarily decides to put a program in place, it can most certainly make that company more attractive for acquisition, possible public offering or investment. Another benefit of implementing a whistleblower program is improved communication company-wide.
Our employees already know about our ethics position – they’ve read our policies (really):
Let’s face it, most employees forget about company policies. Policies and position on ethics seemingly get handed to you when you transition through on-boarding at a new company, only to be buried at the bottom of a pile of other paperwork, or placed on an intranet page where nobody looks. So no, employees probably don’t remember your position on ethics. If you have a program in place, you’ve taken the first step because you care about your employees and you value their feedback and concerns. Ethics reporting tools are a great arena to collect ethics issues that get reported. By taking these issues and investigating them and recommending changes, a company can only strengthen their existing practices.
Our hotline is effective – we’ve had no violations to date:
No news is not necessarily good news. While it may be true that perhaps employees might feel secure in the corporate culture for the moment, it doesn’t mean that at some point, an alleged wrongdoing won’t occur. Ensure that the organization’s whistleblower policy and Code of Ethics is brought to mind on a regular basis and that employees are aware that upper management has completely bought into and encourages the use of the anonymous hotline. In many cases, alleged fraud is only found out by an employee tip to an anonymous hotline.
More and more companies, big and small are embracing the whistleblower hotline. We’ve accumulated a collection of reasons to implement an ethics reporting hotline. Download a free eBook here.