Compliance – it’s not just a business matter
Compliance is everywhere – it’s far from limited to just the workplace. From the moment we are born, we follow rules taught to us, rules we picked ourselves, or guiding principles that make sense to embrace. Parents, teachers, adults, code, holy books, driving instructors, managers, professionals, we all meet role models and experts throughout our life that guide us to make good decisions.
In the workplace, and often despite the best intent, unexpected (and unethical) choices happen. Complying with laws, directives, or even common sense isn’t a sure thing – and when compliance fails, it often comes with consequences. While witnessing unethical behavior happens more likely than we’d like to admit, how likely are employees reporting it? One can be afraid of the outcomes of that testimony which include but aren’t limited to retaliation or being part of legal battles.
Fair game
A business reflects those who created it and those who make it work. That ensemble of various components, with each their own specificities, backgrounds, moral compass, and responsibilities, set the tone for the functionality and management of the company. Thus, unethical behavior and misconduct exist despite rules and social norms. But, just like in private life, the professional self can stand up for the/their right cause and denounce wrongdoing and unethical behavior.
Objectives
I must admit that I’m no expert in compliance and risk management. Compliance is something I historically associated with law enforcement; and whistleblowing reminds me of people who are willing to lose everything to make things better such as Edward Snowden or Chelsea Manning. Then of course there are cases that make global news with names that sound like spy books (Panama papers, FIFAgate, Wikileaks).
Coming with more prejudices would not help me in my endeavor to learn about this industry. So, I decided to deep dive by reading the report with fresh eyes. While I originally thought consulting a 96-page report after only one week at NAVEX was an overwhelming task, how wrong was I!
Not only did I find the report (which is also available in web-first format) to be really insightful from a pure citizen's point of view, it was also extremely educational as a newcomer to the compliance world. With a fresh perspective and loads of information on whistleblowing in my toolkit now, I will highlight the points that caught my attention the most. Then, I will focus on the discourse from the webinar presented on March 26 to the industry leaders.
Top whistleblowing statistics for 2023
- 1.86 million individual reports were collected and analyzed to produce the report. This is a 22.3% increase compared to 2022 and a rise of 35.8% since 2021. For the last several years, we continue to see increases in reporting which could mean employees are more likely to file reports and companies are more effective when it comes to incident management.
- HR, Diversity and Workplace Respect-related issues are the most addressed category by all the companies, except those that have the least amount of reports (0-0.24 reports per 100 employees) and those who file the most (>14 reports per 100 employees). Environment, Health and Safety leads for the group with the lowest amount of reports (24.6%), while Business Integrity is the most reported in the highest group (40.1%).
- The smallest companies file the most reports. There were 3.08 reports per 100 employees for businesses with fewer than 2,500 employees, while medium and large enterprises span between 1.00 and 1.13 reports per 100 employees. From my own experience, there could be several explanations for this trend, one of which being that “human-sized” companies might have a flatter hierarchy than large enterprises and corporations. Thus, the communication pipeline is easier and allows the smooth creation of reports. Also worth noting is that small-to-medium-sized businesses have the quickest closure time: 18 days on average vs. 22 days for organizations with 2,500-9,999 employees, up to 42 days for those with 100K+ employees.
- But they also have the largest rate of “no action” regarding report outcomes amongst all groups. Nearly 1/3 of the small and medium businesses (32.3%) closed the cases without any follow-up, while all the other categories ranked from 9.9% to 15.0% inaction.
- The treatment of anonymous cases stands out. Although the anonymous reporting rate has been rather steady since 2017 (56% of all reports), the percentage of follow-up keeps declining since 2019 (27% vs. 36%) and is even lower than the first year of analysis (2012), with a rate of 30%. The difference in management between named and anonymous reports probably lies in one factor: trust. Dealing with cases with a face and a name behind them reinforces confidence in the matter and also allows for easier follow up to gather additional details. Further, the substantiation rate figures appear to prove that point: 50% of named cases have a “positive outcome,” as in successful investigations proving the rightfulness of the claim, versus 33% of anonymous reports. This gap of 17% is the largest ever recorded since the Whistleblowing & Incident Benchmark Report was first produced.
- The fall of Health and Safety matters. The COVID-19 outbreak deeply transformed people’s behavior at home and work. Companies had to adapt their policies to comply with security and care legislation to put the well-being of their employees first. If this statement was true during the crisis and the immediate aftermath, it seems to be less the case nowadays.
- Health and Safety risks were the most reported in 2021 and 2022 (besides Other categories) but 2023 saw a shift. It was ranked at the third position behind Workplace Civility (8.19% of all cases) and Discrimination (7.57%). It nearly dropped by 4% in two years (10.76% in 2021 vs. 6.86% in 2023). We’ve now learned to live with COVID as endemic, and businesses have updated their rules to comply with safety measures: hybrid work model, usage of sanitary equipment, etc. Because as a collective we’ve learned to live with COVID, the health risk seems no longer to be paramount in terms of risk management and failure.
Final words about the Whistleblowing & Incident Management Benchmark Report
This report is not a guideline simply made of stats and insights. It is a key to accessing the ins and outs and complexities of business in an informative way. Compliance and risk management are not only a duty but also a right, where whistleblowing is the most obvious representation.
I must confess that I was surprised by how broad the spectrum of risk is in a companies: from feral cats in parking and number of donuts in break room, to the serious cases of insider trading or harassment culture. Having an annual comparison to benchmark against educates the reader on trends, but most importantly offers guidance for improvement to reduce risks for reporters and help the businesses align their identity and strategy towards ethical principles, and enhance the quality of follow-up.
This having been my first pass at a whistleblowing benchmark, it’s safe to say I learned a lot. But whether this is your first time reading the report or this is your annual tradition, keeping an eye on the cultural shifts and trends in whistleblowing helps equip you to make informed decisions about your company culture and offers insights to encourage ethical behavior and grow a team of compliance advocates.
To learn more about whistleblowing trends, download the report and watch the webinar on-demand.
