Ethics and compliance software and services company NAVEX Global® recently announced findings regarding whistleblowers from its 2016 Ethics and Compliance Hotline Benchmark Report.

The report analyzes more than 860,000 reports representing 34 million employees at more than 2,300 organizations

Key Findings

1. Companies are taking longer every year to address whistleblower issues identified by employees. In 2015, companies took a median of 46 calendar days to close ethics and compliance cases, up from 39 days in 2014, and 32 days in 2011.

This trend is significant for organizations overseen by the SEC, as they have limited time to complete internal investigations under that agency’s whistleblower provisions.

A festering workplace issue can drag down morale, productivity, and organizational culture.

“The ongoing and significant rise in case closure times is cause for concern, as a festering workplace issue can drag down morale, productivity, and organizational culture,” says Carrie Penman, chief compliance officer and senior vice president, Advisory Services, NAVEX Global.

“It can also lead to allegations being reported outside the organization to regulatory agencies directly.

“Boards and executive leaders should take notice that their compliance programs could lose credibility with employees if this delay is not addressed. Best practice case closure time is an average of 30 days.

“Applying resources to address reports efficiently and effectively pays returns considering nearly half of all issues raised are now substantiated and thereby help organizations make important improvements in how they do business.”

2. Retaliation is being confirmed at sustained higher rate, but employees are still more likely to report externally than internally. Last year’s report found that the substantiation rate of retaliation reports more than doubled over the prior year.

Reporters are more likely to report concerns of retaliation externally than internally.
This higher rate was sustained in 2015 with 26% of all reports of retaliation substantiated. However, the total number of reports of retaliation that organizations are capturing is still very low—less than 1% of all reports—indicating that reporters are more likely to report concerns of retaliation externally than internally.

“This year’s retaliation findings are still problematic because of the low overall rate of internal reporting on this issue,” said Penman.

“Despite higher substantiation rates, which indicate organizations are completing more thorough investigations, employees are not giving employers much of a chance to address this particular issue internally.

“When we look at external whistleblowing—taking an issue to an outside entity—retaliation is still the Equal Employment Opportunity Commission’s most frequently filed charge of discrimination, making up 45% of all private sector charges filed.”

3. More reports being substantiated. Overall, 41% of all reports received were substantiated in 2015, up from 30% in 2010. The anonymous report substantiation rate remained at 36% in 2015, the same rate as in 2014 and 2013.

4. Report volume remains at an all-time high. Between 2010 and 2014 a significant rise in the reporting rate occurred—a 44% increase since 2010, where the median was 0.9 reports per 100 employees, to 1.3 reports per 100 employees.

In 2015, the reporting rate remained at the elevated level of 1.3 reports per 100 employees.

“The consistency of the higher rate indicates increased volume is becoming the new norm and organizations need to be prepared and staffed to manage an ongoing higher level of reports,” says Penman.

5. Organizations that only collect web and hotline report data have an incomplete picture of compliance risk. Organizations collecting and recording reports from all reporting channels—including mail, email, walk-ins and other channels—documented 72% more reports than organizations that documented reports through web and hotline only.