Most Calls to Confidential Hotlines Spur Investigations

A new report analyzing more than 180,000 calls collected by a confidential hotline service that consists of 550 organizations found that in the majority of cases, the callers reported information that warranted an investigation.

A new report analyzing more than 180,000 calls collected by a confidential hotline service that consists of 550 organizations found that in the majority of cases—65 percent—the callers reported information that warranted an investigation.

The report noted that the ensuing investigations resulted in an organization taking corrective action 46 percent of the time, with a range of outcomes that included firing, disciplining or suspending workers who violated company policies.

The “2006 Corporate Governance and Compliance Hotline Benchmarking Report” was prepared by The Network, a hotline and employee communications system provider, using anonymized data from its clients between 2002 and 2005. The CSO Executive Council, a professional organization for security executives affiliated with CSO, performed analysis on the data with help from the Association of Certified Fraud Examiners.

The report included some findings within vertical industries—retail employees are more likely than workers in other sectors to call a hotline, for example. Such breakdowns, along with general findings, could be used by CSOs to evaluate their own company’s experience using hotlines, said Bob Hayes, managing director of the CSO Executive Council. Hayes said he believes this is the first time such a compilation has been done in the three decades since confidential hotlines for whistle-blowers were widely deployed. The researchers plan to produce another report next year incorporating 2006 results, according to Hayes.

Other findings from the just-released study:

• Seventy-one percent of reports to hotlines show management was not notified of an issue before the call was made.

• Callers reporting allegations of corruption and fraud were less likely to remain anonymous than callers reporting other kinds of incidents, such as a concern about health, safety and the environment, or complaining about customer service or unprofessional conduct.

• Thirty-nine percent of those making calls to confidential hotlines learned of the hotline by reading a poster or sign about it.

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Copyright © 2006 IDG Communications, Inc.

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