Enron, WorldCom, and the Bernie Madoff scandal of 2008 are just some of the biggest scandals to hit the corporate world. If not for the whistleblowers, such inappropriate behavior would have continued and would have caused greater damage. But what exactly is whistleblowing? TheFreeDictionary.com defines whistle blowing as the disclosure by a person, usually an employee in a government agency or private enterprise, to the public or to those in authority, of mismanagement, corruption, illegality, or some other wrongdoing.
…whistleblower hotlines are often proposed as one tool in an organization’s internal control arsenal for dealing with fraud. … a whistleblowing system promotes transparency and honesty which are crucial in building a successful organization.
The guiding framework for the design and evaluation of internal control today is the 1992 report issued by the Committee of Sponsoring Organizations, commonly called the COSO Report, asserts that: A key element of good communication is “upstream” communication, such as that provided via a whistleblower hotline (Hooks et al. 1994).
Confidential reporting mechanisms, or whistleblower hotlines, are often proposed as one tool in an organization’s internal control arsenal for dealing with fraud. According to a 2007 whitepaper entitled "Beyond Compliance: Implementing Effective Whistleblower Hotline Reporting Systems" from the Touro Institute, these systems have been in use for more than two decades and are proven as an effective method for detecting workplace fraud and abuse. Reports gathered from these systems are not only limited to accounting finance issues, but can also include reports concerning human resources, bribery, IT, misuse of assets, and other compliance issues.
Hotlines must be operated by trained professional staff with clear operational procedures to follow. These responders must be able to obtain all the relevant information from a caller who may be under stress. Also, security and confidentiality of information is kept private within the company through whistleblower system.
A whistleblowing system aids an organization in upholding transparency and effective communication. It doesn't only protect the company and its employees but the clients as well. Hence, implementing a whistleblowing system promotes transparency and honesty which are crucial in building a successful organization.
ProActive is a whistleblower system that is configurable to fit the needs of various companies of different sizes and industries. It is anonymous, secure, accessible and trackable by design. The succeeding articles highlight key characteristics of ProActive and how it may be relevant to an organization.