If you really want to reduce theft, fraud and unethical behavior, you need an anonymous, externally-hosted ethics hotline. Research from the Association of Certified Fraud Examiners (ACFE), Ernst & Young and others bear this out:
- The ACFE’s 2010 Report to the Nation on Occupational Fraud and Abuse found that 40% of frauds are initially detected through tips, making hotlines the most effective detection mechanism. This is in large part because tipsters can report anonymously without fear of retribution.
- A 2002 study by Ernst & Young reported that one of five American employees have personal knowledge of fraud within the company. About 80% of them indicated they wanted to report the incident, yet fewer than 50% did. Another independent study found that the fear of retribution and of being ostracized by co-workers compelled 54% of those surveyed to remain silent.
- The E&Y report also found that almost 40% of respondents would be more likely to report if anonymity were assured; and 57% preferred hotlines as the reporting mechanism. More recently, The 2010 Corporate Governance and Compliance Hotline Benchmarking Report noted that half of all whistleblower calls in 2009 were made anonymously.
That’s why it’s important that organizations create a confidential, anonymous hotline reporting method managed by a third party. Of course anonymity is viewed differently in other countries; it’s important to implement a system that supports your corporate needs, meets government requirements, and fits with the culture of the country in which it operates. The Ethical Advocate ethics hotline systems and processes can be customized to meet these needs.
For more on our reporter anonymity protections, click here.