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Corporate Governance in Whistle Blower
Various forms of fraud are detected 40 percent of the time by tips. Whistle Blower systems are the leading method of detecting fraud. There is however the fear of retaliation by either peer groups, or by supervisors.
A Whistle Blower hotline is probably the most straightforward and least classy methodology that improves corporate governance. An independent reporting mechanism that uses employees to report mal practices.
- Earlier detection of fraudulent activities is the best way of limiting the loss. A study by the Association of Certified Fraud Examiners reported that fraud discovered through a tip had losses that were 50 percent smaller than similar frauds detected through other methods
- Reports show that coworkers are aware that something was incorrect well before management had a clue. An open-door policy does help. A surprising number of employees report that they have previously informed management of their concern, yet they believe that no action is being taken.
- Ernst & Young conducted an employee survey that demonstrated that almost 40 percent said that they would likely report if they could remain anonymous. 80 percent said that they would be willing to report a co-worker's unethical or illegal conduct
- An early detection and response to discrimination or harassment claims can substantially limit liability.
- Human interaction is preferable to ensure that information is understandable, absolute, and consistent.
An independently-run Whistle Blower solution can be inexpensive solution
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