18 Jan 2008 in Corporate Culture, Ethics and Compliance Offices
Employees won’t tell you about the misconduct they observe, because they don’t believe corrective action will happen, they don't trust the company to keep their report confidential, and they fear retaliation from management and other employees. Most companies respond to this by outsourcing the hotline service, in the hopes that employees, knowing that their identity is protected, will tell all. Unfortunately, this is the wrong answer to the wrong question.....
Our recent survey found that most hotlines for reporting misconduct are, or are about to be, outsourced. Among other reasons, companies typically outsource hotlines to improve utilization, and to protect employees from retribution. However, our survey indicates that the outsourced hotlines generally experience lower utilization rates than in-house services. More significantly, not one of the respondents outsourcing the hotlines reported that any employees had called those lines to seek answers about the company’s code of ethics or for advice about ethics or compliance issues at work.
Clearly, employees are more likely to report misconduct to, or seek ethics advice from, a company’s ethics office than a vendor. But data from various surveys suggest that incidences of corporate misconduct are increasing, while the numbers of people reporting misconduct is in decline.
Employees in ERC surveys cite two principal reasons for not reporting misconduct: belief that no corrective action will be taken, and fear of retaliation. Which brings us to the right question: what steps can companies take to improve their corporate character, their ethical culture, their ethics and compliance programs, to enable employees to actively learn about appropriate ethical behavior from each other and management?
GE
