Ethics and fraud hotlines as we know them today began emerging over thirty years ago. As the Association of Certified Fraud Examiners has reported, most ethics and fraud wrongdoing is discovered through tips from employees, suppliers, and others; a large percentage of those tips come through hotlines.
As it is with any system or process, it is important to review your organization’s hotline system regularly, to ensure it remains effective. How does your hotline compare to the following list of hotline best practices?
1. Championed by an executive leader
2. Coordinated across all relevant departments – audit, communications, finance, human resources, information technology, legal, loss prevention, operations, risk management, and the board of directors
3. Accepts anonymous reports
4. Accepts foreign language reports or can be easily upgraded to accept such reports for current or future international operations
5. Accepts reports of all types, not different hotlines for different types of reports
6. Staffed 24 X 7 X 365 (typically easier done with an externally managed hotline)
7. Call representatives trained to handle a wide variety of calls
8. Constant maintenance of data security and data confidentiality processes
9. Feeds into a central intake/central case management database for all reports, not just hotline reports; one initial internal point of contact for all reports (ethics and compliance officer)
10. Electronic case tracking available, with appropriate access by all lines of business involved in the case
11. Built-in report generation and report management capabilities
12. Processes documented and regularly reviewed
Effective hotline systems incorporate most of the preceding best practices, and they are supported by ongoing communications and by policies that promote an ethical culture. External ethics hotline providers, like Ethical Advocate, can deliver on most of these best practices, and can provide training and guidance in support of internal processes that help create and maintain a culture of ethics and accountability. Contact us for more information.
Haines, Gregory G. An Analysis of Hotline System Best Practices to Help Identify Occupational Fraud Within Financial Institutions. Master’s Thesis, August 2011.