This is a question we get asked frequently when working with clients who are looking to implement an independent and externally managed whistleblower hotline. And it’s a good question to ask.
With your overall business objectives in mind, it’s important to set your program up for success from the get-go. To achieve that, you need to have the right policies, processes and capability in place. This ensures that you not only uphold the provisions of the whistleblower legislation to protect your people, but that you also get it right when they do speak up.
But just how many reports should you expect?
Well, that depends on a variety of factors. In this blog post, I am going to shed some light on some of the factors that can influence how many reports your hotline might receive. I’ll be also sharing some global hotline reporting statistics that you can use as a handy benchmark for your own organisation – regardless of what industry or sector you operate in.
Whistleblowers are a sign of healthy companies
Before we get into the detail, let’s dispel a common myth that not receiving any whistleblower reports is a good thing. In our regular program reviews, we often hear executives saying that they hope there are no reports to their hotline. In reality, whistleblowers are crucial to uncovering serious instances of fraud, corruption and misconduct that might be occurring in your organisation. An article from the Harvard Business Review in 2018 outlines the valuable role whistleblowers play in uncovering some of the biggest scandals of our recent time.
I actually find it quite strange when executives hope (and sometimes pray!) for zero reports. Unless you are certain that your organisation has zero instances of bullying and harassment, fraud and corruption, conflicts of interests with external parties or general employee misconduct, then it’s quite naïve to think getting no reports is a positive.
The more secure and trusted reporting options you can provide to your employees, suppliers and partners, the better. It results in issues being identified earlier which means the potential impact to your people, reputation and bottom line is less.
7 factors impacting the number of whistleblower reports
Let’s take a look at the various factors that can have an impact on how many reports your hotline receives.
1.The tone from the top
This is a well-used phrase and for good reason too. Tone from the top is critical for almost everything that occurs in an organisation. Whistleblower hotline is no exception. The bottom line is that the Board and CEO have to be committed to creating a safe speak up culture and hearing from their people about issues. Otherwise, the organisation is going to struggle to get any traction with its whistleblower policy and the hotline program. Awareness of the program will be low, there will be little to no training. As a result reporting volumes will be low, if not non-existent.
2. The size of your organisation
Naturally, the size of an organisation will have an impact on overall reporting volumes. However, if you consider the ‘reports per 100 employees’ ratio then you can still assess whether your organisation should be receiving reports.
To implement an effective hotline and receive increasing reports over time, organisation have to invest in a comprehensive program. This includes promotion of the channels and creating awareness, as well as training of employees, executives and key roles on how to report and respond to issues. The larger an organisation, the more resources it has to invest in its program. Smaller organisations have less budget, less internal capacity and lower levels of capability. That can impact the effectiveness of their hotline programs.
3. Your industry or sector
Not all industries and sectors are the same when it comes to reporting serious issues. Risk plays a big role in how effective reporting mechanisms are. Some businesses operate in low-risk industries and as a result aren’t focused on the reporting of fraud, corruption, misconduct and safety. Others have a much higher exposure to risks. They are likely to invest considerably in ensuring they manage those risks effectively. A good example here is the difference between organisations operating in construction and logistics versus knowledge workers who work in service-based industries.
4. The legal and regulatory environment you operate in
Certain industries and sectors are more highly regulated than others. They have legislated obligations around the reporting of serious issues and breaches such as fraud, corruption and employee misconduct. A good example of this is financial services: ASIC and APRA play a key role in setting expectations around identifying, responding to and reporting serious issues that can impact customers and undermine the health of the financial system. The more highly regulated the industry, the more reports you should expect across your organisation.
5. The maturity and capability within your organisation to respond to reports
How you respond to issues can have a massive impact on the long-term success of your whistleblower hotline. One of the most common criticisms of organisations is how they respond, or fail to respond, to reported issues. They often take too long to respond to issues and investigate them. Other common mistakes include not communicating and updating the whistleblower on how the investigation is progressing and sweeping issues under the carpet.
There is a reasonable expectation that when a report is made it will be handled appropriately. It must be reviewed and assessed in a timely and unbiased manner and the appropriate response must be undertaken. To build trust and improve your culture, it’s vital to invest in having the right capability to make informed decisions and respond to issues.
6. How you promote your hotline
It may sound obvious: if you don’t go to any effort to promote your Whistleblower Policy and your hotline program, your reporting volumes will likely be low. Don’t make the mistake of assuming that your employees are aware of your whistleblower hotline. You need to regularly communicate and reinforce your whistleblower policy and hotline program if you want it to work. We see first hand the direct impact that both effective promotion and a lack of promotion has on the number of reports received.
7. Your culture
This is a big one and it is obviously linked to the first point around ‘tone from the top’. The overall culture of your organisation can have a huge impact on the volume of reports your hotline receives. Trust is built over the long-term by doing the right thing on a consistent basis. Your people will notice what you do in this space. It’s crucial that your Board and CEO set the right tone when it comes to whistleblowing. They need to make it extremely clear that the organisation wants to hear from its people, and that if you do speak up, you will be listened to, believed and most importantly protected. Responding to whistleblower reports is not easy. It takes experience, skill and sound judgement.
A global rise in the reporting of issues
There is no doubt that the levels of whistleblower and general ‘speak up’ style reports are increasing both here in Australia and abroad. The statistics back this up. In our business, we are seeing a sharp rise in the levels of reporting across our portfolio of clients across corporate, government and sports.
The rise in reporting is no surprise given the increasing expectations of employees and the community more generally. Poor conduct and misbehaviour are no longer to be tolerated, ignored or swept under the carpet.
Here in Australia, over the past years, we have seen a plethora of royal commissions, parliamentary and industry-specific inquiries take place. They all found that most organisations, across most industries, have historically failed in 3 key areas:
- Providing a safe speak up culture for their people to report issues (including appropriate reporting channels).
- Taking timely and appropriate action when people do raise issues.
- Organisations have victimised persons reporting or taken detrimental action against them leading to loss of employment, mental health issues and even suicide.
What do the statistics say?
So we know that the reporting of issues is on the rise. But just how many reports should you expect in your organisation?
One resource that can be used as a solid reference point to measure the effectiveness of your whistleblower hotline program is the Navex Global 2020 Regional Whistleblower Hotline Benchmark Report. Every year Navex compile statistics across their global portfolio of hotline clients. Their yearly benchmark report is a useful guide to get a sense of what the levels of reporting are across the globe. Navex uses a simple metric of ‘reports per hundred employees’ and they break this down by geographic regions.
A snapshot for 2019
- North America: 1.5 reports per 100 employees
- Europe: 0.5 reports per 100 employees
- South America: 2.2 reports per 100 employees
- APAC: 0.7 reports per 100 employees.
There are two things to point out in these statistics.
The first is the low level of reporting across the Asia-Pacific Region (APAC). The average is only 0.7 reports per 100 employees, which is incredibly low. This is likely impacted by some of our neighbours where corruption seems to be more prevalent and potentially more acceptable. It would be interesting to know what Australia’s average is given we are ranked 11th globally on Transparency International Corruption Perceptions Index.
The second is the high levels of reporting in South America. Both Uruguay and Chile feature in the top 25 country rankings on the same Corruptions Perceptions Index. However, they are weighed down by the likes of Argentina at #78, Colombia at #92 and Brazil at #94. It would be interesting to know what is driving such high levels of reporting per 100 employees.
Check your numbers
There are many factors that can influence the effectiveness of your whistleblower hotline. The good news is that most of those factors can be influenced by what you do internally within your organisation. Setting the right ‘tone from the top’ is an important first step. This needs to be supported by the regular promotion of the program to create awareness. Most importantly, aim for ongoing investment in uplifting the internal capability. Ensure you respond to each and every report in a timely and appropriate manner.
How many reports your hotline program has received in the past 6-12 months? Compare your numbers to the averages outlined above. The results might surprise you.
If you want to improve the performance of your whistleblower hotline program, promote it more effectively or build your internal capability, get in touch. Our team would be happy to share our knowledge and see if we can help.