Every year it’s safe to assume that our list of Top 10 trends will include the latest developments pertaining to helplines, whistleblower reporting and retaliation, and this year is no exception. We begin by examining some hard data on the topics.
The NAVEX Global annual benchmarking reports review a variety of key metrics related to ethics hotlines reports, processes and outcomes. The data, along with our discussions with our clients and colleagues, help highlight several key trends that all ethics and compliance professionals should be aware of in the coming year.
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Top 10 Ethics & Compliance Predictions and Recommendations for 2017
1. Case Closure Time Is Up
Over the last five years, the time it takes organizations to close a case has risen to risky levels – a median of 46 days in 2015 up from 32 days in 2011. Reasons given for the delays include insufficient resources and complexity of cases in the current regulatory environment. This may make perfect sense for Chief Compliance Officers, but for the employee who has raised a concern and is waiting for a response, every day can feel like an eternity and an opportunity for retaliation. Our data also shows that less than 1 percent of all reports in our database (of over 867,000 reports) are claims of retaliation. This suggests that employees who believe they have experienced retaliation are not reporting this back internally or that actual retaliation happens at a much lower rate than feared.
2. E&C Groups Cannot Abdicate Responsibility
While the E&C office is not always the team that conducts the actual investigation, it is critically important to ensure that all issues raised through our ethics hotlines are properly investigated and that appropriate action is taken in a timely way. We see too many organizations use their whistleblower reporting system as a clearing house to farm out reports to other organizations for action and then immediately close the case with no visibility into actions, timing or outcomes. If we abdicate responsibility with no follow-up, it is our credibility on the line and the potential for bad outcomes goes up.
3. Managers Are First Line of Reporting and Need Training
E&C officers have long known that most employee concerns about misconduct don’t come through the helpline. In most cases, employees bring their issues directly to their managers. When managers turn a deaf ear to those complaints, it is because they either don’t know what to do with a complaint or don’t want to take the necessary steps to address the concern. We, as business leaders, have an obligation to assist managers with this important responsibility. We need to provide them with training on how to respond and tools for them (and us) to enter and track issues they receive to an appropriate resolution and closure.
4. Policies and Processes Deserve more Attention
The stakes a very high for getting this part of a whistleblower program wrong. Failures at this level telegraphs to employees, regulators, investors, customers and the public that your culture is wrong. That, in turn, can lead to steeper regulatory fines, loss of reputation, loss of good employees and even loss of business.
5. Whistleblowing and Retaliation Needs to Be on the Board Agenda
The current regulatory focus, especially in the U.S., by numerous agencies on whistleblower reporting, incident management and retaliation is unprecedented. If this hasn’t been a topic of discussion with your board and C-suite yet, it needs to become a priority.
An additional issue to consider is how investigation protocol may need to be changed due to recent published guidance from the U.S. Department of Justice (DOJ). This guidance is commonly referred to as the “Yates Memo." The Yates Memo is the latest in a line of guidance which seeks to turn up the heat on culpable individuals in organizations being investigated for criminal or civil wrongdoing. It remains to be seen what the long-term impact will be, so it is necessary to read and address the plain language of the memo which requires organizations seeking cooperation credit from the DOJ to fully investigate individuals and share “all relevant facts” of the investigation. Cooperation credit is “all or nothing.”
While the Yates Memo may focus on individual culpability, senior executives and in-house counsel must also be mindful of how organizations conducting “post-Yates” investigations can claim and utilize the attorney-client privilege in an era where the DOJ requires “all information.” How does the organization maintain the privilege while disclosing sufficient information expected by the DOJ?
Key Steps for Organizations to Take
- First and foremost, accept that internal reporting is a good thing; that the majority of reporters do so with good intentions; and take all reports received seriously and investigate without bias. Treat your employees as reporters, not as whistleblowers or “snitches.”
- Establish strong and consistent investigation and discipline processes and policies.
- Train investigators on proper techniques and required reporting. Evaluate legal involvement and sign-offs to protect organizations and individuals post-Yates.
- Train on retaliation at all levels of the organization including the front line, and test and assess the organizational culture and employee beliefs around speaking-up and fear of retaliation.
- Manage or oversee all reports to closure. Don’t abdicate responsibility for reports by forwarding them to another department and closing the report without further review.
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