Why Whistleblower Hotlines are a Best Practice

According to the first-ever Global Business Ethics Survey (GBES) generated by the Ethics Resource Center, 36 percent of workers in multinational companies indicated they had witnessed workplace misconduct in the previous 12 months. The survey suggests that lying and being abusive are the most commonly seen forms of misconduct in almost every country.

The GBES also points to change (merger, acquisition, management restructuring, etc.) as a significant factor regarding the rate of misconduct. Only 17 percent of survey respondents indicated they witnessed misconduct in organizations where no significant changes occurred. By comparison, the rate in organizations that underwent 1-3 or 4-7 substantive changes was 40 percent and 59 percent, respectively.

How are organizations detecting occurrences of misconduct? Using fraud as an example, the survey indicates that, by far, the most common way organizations see fraud is through anonymous tips received via ethics hotlines. According to the study, 43.5 percent of frauds in U.S. organizations with 100 or more employees were discovered through information. In comparison, only 18.6 percent were uncovered by internal audit and 12.7 percent by management review.