I count myself among the many who have long admired Mr. Augustine as a champion in the field of business ethics. His observations are consistent with what I hear from others who are on the receiving end of hotline calls; namely, that many hotline allegations are of the routine HR variety, and few ever produce a “stop the presses” moment. But it may be premature to end the story there.
A national survey of employees that KPMG ran in 2005-2006
revealed that 74% of employees nationally observed misconduct within the prior 12 months. The survey instrument was designed in such a way that respondents had to choose from specific, pre-defined categories of misconduct. Because respondents were only offered categories of misconduct that were more serious in nature (e.g., deceptive sales practices, falsifying financial reporting data, circumventing supplier selection rules), we have reason to believe that the 74% of employees weren’t talking about cutting in line at the lunch counter. As an added measure, we asked employees nationally whether what they observed was serious enough that it could cause “a significant loss of public trust if discovered.” Half of the respondents (50%) said yes. Stop the presses.
The lack of significant risks coming through the hotline may not mean that those risks aren’t out there – it may just mean that they aren’t surfacing until it’s too late.
Scott Avelino
Principal, Forensic Services
KPMG LLP
The views expressed by Scott Avelino are his own, and not necessarily those of KPMG LLP.
Norm Augustine has been invited to respond to the recent posts by Scott Avenilo and Patricia Harned. Watch for Norm's comments this week.
