“Anonymous and confidential reporting mechanisms help foster a climate whereby company employees are more likely to report or seek guidance regarding potential or actual wrongdoing without fear of retaliation.”
—Elements of an Effective Whistleblower Hotline, Harvard Law School Forum on Corporate Governance and Financial Regulation
An anonymous reporting system is not a panacea that will magically convince employees to overcome their fears about coming forward to report harassment, discrimination, and other workplace misconduct. There will always be individuals who prefer to talk to their managers face-to-face. At the other end of the spectrum, some people will never come forward to report what they’ve experienced or witnessed, no matter how robust their company’s anti-harassment program is.
For everyone in between, an anonymous way to report misconduct is a vital cog in any workplace ethics and compliance program. The U.S. Equal Employment Opportunity Commission (EEOC) makes the case for anonymous reporting in its “Select Task Force on the Study of Harassment in the Workplace” report. It states that “effective reporting systems for allegations of harassment are among the most critical elements of a holistic anti-harassment effort” and specifies that a path to anonymous reporting must be a part of any comprehensive reporting system.
This is because the fear of retaliation is a major factor driving the woeful lack of reporting. An estimated 90 percent of people who have experienced harassment never initiate formal action, such as reporting a complaint or filing a charge, the EEOC reports.
In its report “Elements of an Effective Whistleblower Hotline” the Harvard Law School Forum on Corporate Governance and Financial Regulation found that “In companies with an internal hotline, tips account for over half of all fraud detection versus only one-third of detections in companies with no internal hotline. Notably, the rate of discovering fraud “by accident” more than doubles when a company fails to offer a hotline.”
Create a Speak-Up Culture
One of the five principles of a high-quality ethics and compliance program is encouraging a “Speak Up” culture, according to the Ethics and Compliance Initiative, which it defines as an organization that “encourages, protects and values the reporting of concerns and suspected wrongdoing.” When employees felt encouraged to make their voices heard, even when it was with bad news, favorable ethics outcomes increased by 14 times, according to the ECI report, entitled “Measuring The Impact Of Ethics & Compliance Programs.”
Communicate, Communicate, Communicate
The ECI report found that other critical actions a company can take that result in favorable outcomes involve the company’s communication about the anonymous reporting system. It lists the following key ways a business should behave in order to encourage reporting from its employees.
- Company Responds in a Timely Manner after Reporting;
- Management Keeps Employees Informed After Reporting, and
- Company Explains Reporting Procedure/Process.
All these points underscore the fact that a company is unlikely to reap benefits from an anonymous reporting system unless they actively communicate on its behalf and respond quickly to any reports they receive.
The Harvard Law School Forum on Corporate Governance and Financial Regulation states that companies must constantly and actively evaluate their anonymous reporting systems to ensure their success. The forum states that evaluation is required to ensure they “are operating as intended and are effective in preventing and identifying unethical or potentially unlawful activity, including corporate fraud, securities violations and employment discrimination or harassment. This evaluation should be a key element of every company’s assessment of its compliance and ethics program.”
The report goes on to list key factors necessary to make anonymous reporting systems such as whistleblower hotlines effective. They include:
- Ensuring anonymity and confidentiality. (Read more about how anonymous reporting works here.)
- Preventing retaliation against those who report wrongdoing. (Read about why so few employees report wrongdoing.)
- Publicizing the hotline.
- Creating multiple uses for the hotline, including a helpline. (Learn more about how anonymous reporting systems can go beyond capturing just harassment.)
- Recording and analyzing statistics.
- Benchmarking compliance programs to internal and external data sources.
- Hiring a third-party provider to manage the hotline.
- Allowing multiple methods for submitting tips. (Read about why multiple reporting channels are needed.)
- Evaluating, testing and auditing the reporting systems.
All the major studies show that a company cannot implement an anonymous reporting system and then sit by passively and assume that it will work. The business must play an active role in ensuring its success by encouraging people to speak up and then communicating about and closely evaluating to systems that have been put in place to prevent harassment and discrimination in the workplace. (Read more about best practices for anonymous workplace reporting systems.)