Corruption is a reality
According to a 2017 survey, approximately 900 million people across just 16 Asia-Pacific countries are thought to have paid a bribe to a public service such as a school, hospital or court. While those numbers were about public authorities, it would be reasonable to assume that a similar figure would apply to private businesses in the region, so it is worth considering the possible impacts in any transaction, whether that transaction is big or small.
Growing concern about corruption in businesses
In fact, one out of five employees answered that they were willing to attempt unethical behaviour to advance their career, and that number appears to be growing with each generation. Millennials, who represent the biggest percentage of the current workforce, showed a propensity for the most unethical behaviours from all generations, with 25% of Gen Y respondents indicating they would offer cash payments to win or retain business, compared to 14% of employees from all other generations. The latest Report to the Nations says that a typical organisation loses 5% of revenue as a result of fraud, so the importance of efforts against corruption for any company running business either internationally or locally cannot be underestimated.
A hotline channel is the first line of defence against a culture of corruption
Having an effective whistleblowing programme and hotline channel in place is a proven method for preventing and minimising the costs associated with bribery and corruption. In the study, the most common detection method was tips – or whistleblowing reports – which uncovered 39.1% of cases. Organisations that had reporting hotlines were much more likely to detect fraud through tips than organisations without hotlines (47.3% compared to 28.2%). This indicates that without a hotline system many corruption cases would never come to light.
The hurdles of compliance reporting
But a hotline is just part of a complete solution, because 74% of people who have witnessed or experienced corruption globally have not reported it.
There are many reasons why people don’t report wrongdoings. One of the biggest deterrents against reporting is fear of retaliation. With more than 20% of reporters experiencing negative impacts after reporting, it can be very difficult to justify the risks.
As much as people think corrupt behaviour and bribery is acceptable, the social acceptance of reporting corruption is surprisingly low, with the majority of respondents in only ten out of 44 European countries saying that they think it is socially acceptable to report misconduct. In Lithuania, Bulgaria, Croatia and Hungary, only around 15% of citizens think it is acceptable to report corruption. This indicates that driving anti-corruption in an organisation requires cultural behaviour changes, not only corrective policies and rules.
Four pillars to build a strong internal reporting mechanism
The below four components are essential for an effective reporting mechanism:
What can be done to enhance the effectiveness of a whistleblowing programme
Often times when people think about accessibility they will only consider the type of reporting channel (e.g. toll-free call centre, email address, mobile app, web form), but accessibility can also be increased by ensuring the reporting method is always easily found, fit for purpose and simple to use, and can be accessed at any time. Proactive communication channels and engagement can be vital for increasing accessibility.
Efficient intake method and follow up
Over 50% of reports are done anonymously, leading to many being closed without investigation because of a lack of information. In order to gather enough information to kick off an investigation, an efficient initial intake method is crucial. Whether the reporter is interviewed by a human or completes a web form, the interview should gather key information based on the risks that are relevant to the topic and jurisdiction. Improper payment risks, for example, can be much more severe when paid to government officers than in commercial dealings, so it is imperative to know how each reported event unfolded.
Even though allowing anonymous reporting can result in false accusations and wasted investigation resources, an effective whistleblowing system requires complete anonymity and security. Effective communication from the top levels of the company and continuous training can be useful for minimising false reports.
It’s not uncommon for companies to spend all their hotline resources on the installation and none on marketing the hotline, with reports suggesting that, on average, only about one-third of employees know of their hotline's existence. As important as it is to have secure and reliable hotline channels, it is essential to communicate those channels effectively and continuously to the employees and community, so they feel safe to report wrongdoings.