Are you going to introduce a whistleblower hotline to your business? This presentation covers policies, and internal/external considerations you'll need to make note of

1. INTRODUCING A
WHISTLERBLOWER
HOTLINE?
Policies, External & internal Considerations

2. Reputational Risk
“It takes many good
deeds to build a
reputation and only one
bad one to lose it. “
Benjamin Franklin

3. Quick Facts
¤ 40% of people said their
businesses have a weak ethical
culture
¤ 62% were confident in their
firm’s senior leadership
¤ But 43% said managers don’t
display ethical behavior

4. More Quick Facts
¨ 65% of those who
witnessed misconduct
reported the issue
¨ 13% of employees felt
pressure to compromise
their ethics in order to do
their jobs
¨ But 22% of
whistleblowers said
their companies struck
back at them for
spilling the beans
¨ Source: KPMG Survey 2013

5. Good Corporate Governance
¨ Protects both the
company & employee
¨ Deters & eliminates
waste, loss, theft
¨ Increases employee
morale & engagement
¨ Limits liability for
directors and
managers

6. Ethics & Compliance Programs
¨ Protect Reputational &
Financial Integrity
¨ Shelter organization &
management from
costly litigation &
penalties
¨ Increasing global
regulatory reach –
FCPA, UK Bribery Act,
Dodd-Frank
¨ Improve corporate
culture & increase
shareholder value

7. Effective Policy Development
¨ Key to consider existing corporate culture
¨ Creating tone at the top – walk the walk, speak the
speak all the way to the Middle
¨ Clear, easy to understand policy
¨ Non-retaliatory in nature
¨ Dissemination and training

8. Policy Considerations
¨ Ensure decision making is consistent & sets ethical
considerations
¨ Examine industry specific risk to identify additional
fraud protection
¨ Policy needs to have clear expectations and
anticipated outcomes
¨ Code clearly defines level of expected behaviour

9. Canadian Regulations
¨ Multi-Lateral 52-110
¤ Audit Committee must
establish procedures
for receipt, retention &
treatment of
complaints
¨ Imagine Canada
accreditation for
charities and non-
profits
¨ Potential new OSC
whistleblower hotline

10. Impact of Hotlines
¨ Tips are the best
method method to
detect fraud
¨ Over 40% of fraud is
discovered by a tip
¤ Source: ACFE Report to the
Nations 2013
¨ The better you are at
collecting and
responding to fraud,
the better you will be
at detecting it and
limiting losses

11. Trends
¨ 5 year trend of rising report volumes continues
¨ Case closure times continue to climb
¨ Low rate of anonymous reporters who follow-up with their initial report
extremely low
¨ Substantiation rates for reports of retaliation increased by 3 times
¨ 80/20 split of calls between reports & inquiries
¤ Source: Navex Global Hotline Benchmark Report 2015

12. Setting Up the System
¨ Average hotline volume amounts to 2-5% of
employee population annually
¨ Volume varies dependent on:
¤ Corporate culture
¤ Promotion & training
¤ Confidence in management’s commitment
¤ Current issues facing company
¤ Past behaviors and reactions

13. Outsource or Internal Considerations
¨ Cost effectiveness
¨ Availability
¨ Regional/National/
Global Needs
¨ Training, Promotion
¨ Responsiveness
¨ Anonymity option is key,
but system must
incorporate ability to
communicate with the
reporter
¨ Bottom Line: Any system
is better than none!

14. Outsource or Internal Hotline
¨ In-house system does not always provide the level of
confidentiality and protection of anonymity
¨ In-house system may not have requisite sophistication
designed for this program
¨ Perceptions exists that management is truly committed
if third party introduced

15. Outsource or Internal Hotline
¨ Voicemail can compromise
anonymity
¨ Trained agents more likely
to elicit important
information
¨ Trained agents not
distracted by other duties
¨ 24/7/365 access is key

16. Outsource or Internal Hotline
¨ Comprehensive back-end incident management
system & cataloguing capabilities
¨ Reporting, analytics and holistic oversight
¨ In-house operations hampered by employee
vacation, sick time and other duties
¨ Marketing materials and training
¨ Translation and interpretation requirements

17. Case Lifecycle
Claim
Receive
Analyze
InvestigateResolve
Report
Retain

18. Decision & Implementation Priorities
¨ Code of Conduct
Development
¨ Whistleblower Policy
Development
¨ Infrastructure and
processes built out
¨ Communications
Planning Strategy
¨ Train, Train and Retrain
¨ Senior Management
Engagement

19. Program Launch
¨ Code of Conduct
¨ Toll free lines setup
¨ Scripting
¨ Web portal
development
¨ Responsive Workflows
¨ Translation &
Interpretation
¨ Anonymous dialogue
workflows
¨ Reporting, follow-up and
analysis
¨ Training in-house
personnel
¨ Marketing & Collateral
materials

20. Implementation
¨ Introduction of Code & related policies
¨ Training
¤ Lunch & Learns
¤ E-training
¤ Corporate Intranet & Newsletter
¤ Role Playing
¤ Sanitized Case Studies

21. “Berkeshire would be more valuable today if I had
put in a whistleblowing (hot) line decades ago. The
issues raised are usually not of a type discoverable
by audit, but relate instead to personnel and
business practices.”
Warren Buffett, Chairman of Berkeshire Hathaway
2005

22. Retaliation – The Reality
¨ The mere perception of retaliation is enough to deter
reporting of misconduct
¨ Where trust is high and perceptions of management
and peers are more positive, retaliation is far less
prevalent
¨ Zero tolerance = 8% of employees experience
retaliation as opposed to 38% where top management
does not take a stand against retaliatory behavior

23. Retaliation – The Experience
¨ Retaliation is now the most common form of
discrimination alleged in the US topping both race and
gender.
¨ 82% of whistleblowers experience harassment after
making allegations
¨ 60% were discharged from their jobs

24. Retaliation Experience
Whistleblowers may experience:
¤ Blacklisted from future employers
¤ Face social ostracism from co-workers
¤ Undergo stressful psychological strain
¤ Forced to transfer jobs
¤ Legal Actions
¤ Dismissal
¤ Blocked Promotion

25. Anti-Retaliation Policy
¨ Implement zero
tolerance policy
¨ Train all employees
¨ Effectively manage
investigations
¨ Position whistleblowing
as not disloyal but
supportive and
expected behaviour
¨ Share examples of
retaliatory conduct

26. Anti-Retaliation Policy
¨ Apply policies
consistently
¨ Do not ignore or
isolate claimants
¨ Address & document
performance issues
immediately
¨ Carefully review
discipline &
termination decisions
¨ Ensure communication
is reinforced

27. Anti-Retaliation Support
¨ Ensure supervisors/decision makers trained on the
following:
¤ Policy prohibits retaliation
¤ Basic element of retaliation claims
¤ How to communicate and reinforce anti-retaliation
policy
¤ How to observe employee non-compliance

28. Summary
¨ Any hotline and case management system is better than
none
¨ Whistleblower hotlines and policies that support them
are designed to create a culture of integrity, empower
employees and improve morale
¨ Anti-retaliation policies encourage use of hotlines and
reinforce management’s commitment to transparency

29. Contact Information:
Shannon Walker
WhistleBlower Security
604.921.6875
shannon@whistleblowersecurity.com
www.whistleblowersecurity.com