A recent survey of FTSE 250 companies by Middlesex University Business School revealed that almost half of organisations (49%) now have a whistleblowing hotline, the majority of which are provided by an external supplier.
So why are more firms choosing to go down this route and, more importantly, is it a good idea?
Professor David Lewis, who conducted the research, said that one of the main benefits of using a hotline is the confidentiality it provides, enabling anonymous reporting.
Using an external provider also makes the service independent, provides expertise that may be lacking internally, and ensures reports are handled consistently.
However, he suspects that another reason firms are taking this route is because they are benchmarking themselves against competitors.
“If firms start using this method in one sector, others tend to follow,” he said. “This seems to be the case within high-risk sectors such as financial services, where financial irregularities are a concern, and also the airline business, where health and safety is a priority.”
KPMG launched an independent confidential 24-hour whistleblowing hotline service last December for UK companies, called Ethics Line.
David Luijerink, director at KPMG Forensic, said clients see independence as a big benefit.
“Employees often worry about reporting direct to the company for fear of victimisation. It’s also important to ensure that appropriate detail is provided to allow a full investigation and that the information goes straight to an independent, senior person within the company,” he said. “Hotlines also take care of compliance issues around data disclosure and confidentiality.”
Providing a 24-hour service is also key. “Many calls are received after hours, but few companies would be able to provide an in-house service out of hours,” said Luijerink.
However, trade union GMB is wary of this trend, and believes that hotlines are little more than a form of damage limitation, restricting the potential of whistleblowing to harm the organisation.
Bert Schouwenburg, GMB organiser, said: “Companies maintain that they are protecting staff from reprisals, but we view this with scepticism. We have dealt with cases where, as soon as an employee made a legitimate complaint, they were subject to bullying and harassment.
“Companies should save their money and encourage their employees to be part of an independent trade union that the company can work with to ensure that everyone is covered.”
But Joanne Martin, partner at law firm The Hardman Partnership, said that anything that provides a clear policy and procedure for whistleblowing is a good thing.
“Using an external service such as this can protect both staff and employers,” she said. “Without clear guidance, it’s been known for employees to go straight to the press without realising that they are not necessarily protected from dismissal or other detriment. Having a hotline available minimises this risk and encourages staff to make official reports.”
The anonymity provided by independent hotlines can also protect the employer if the member of staff is dismissed for another reason. “It gives good defence that they did not know that employee had made a disclosure,” said Martin.
If whistleblowing is handled incorrectly, employees can suffer needless stress, and the damage can be also be bad for business – both financially and for the employer brand.
Whether hotlines truly mitigate these risks is debatable, but with more firms signing up, it looks like they could be here to stay.
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