Measuring Compliance Program Effectiveness

A compliance program effectiveness survey (by Compliance Week and PWC) was highlighted in an article today (October 11, 2011).  Respondents replied that they use hotline usage as a way to measure compliance program effectiveness.  If a hotline is getting no usage anywhere other than the smallest of organizations, one has to question the effectiveness of organizational compliance.

As one insurance industry executive is quoted – “’You know [the hotline] is effective if you find problems … and correct them before anything happens,’ …. ‘It’s almost scarier if you don’t hear anything.’”

For example, there are allegations of animal mistreatment at Princeton University.  (Ethical Advocate does not provide any services to Princeton.)  An article published on September 30, 2011 indicates that the university has not received any complaints to their hotline since 2007.  The Princeton article indicates that a whistleblower went to an external organization to address their concerns; the whistleblower did not use the Princeton hotline.  Did this person not know about the Princeton hotline or did they just choose to go elsewhere?

We think the compliance officer should regularly review the volume and content of the hotline and use this information to question their compliance program’s overall effectiveness.  The hotline volume and content are not an absolute measure.  However, this information does provide insight into trends, risk areas, and employee concerns.  If this review shows low or no hotline volume, this should generate questions regarding the cause.

Here are some relevant questions for your organization:  What can your organization do to improve the compliance program?  What can your organization do to improve the hotline?  Does everyone know about the hotline; is the organization effective in communicating the hotline’s availability?  Does your organization effectively manage issues that are reported?