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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.
