Several years ago I taught a continuing education course on ethics at a local chapter of the Association of Certified Fraud Examiners (ACFE).  There was a beautiful mix of professionals from a wide variety of industries. In my 15 years in the ethics and compliance space, I’ve learned one of the most common threats to corporate productivity, regardless of the industry, is fraud.   The ACFE is dedicated to helping anti-fraud professionals reduce the number of white-collar crimes and fraud incidences. Whether Ethics and Compliance (E&C) professionals are a member of the ACFE or simply an admirer of their work, like I am, there is a lot of valuable information E&C professional can learn from the ACFE.

According to ACFE’s  2018 Report to the Nations an anonymous hotline or whistleblower line is one of the most effective ways to detect fraud in an organization.  They found that organizations with hotlines detect fraud by tips 46% more often than companies without a hotline.  Additionally, telephone hotlines are the most popular intake method, accounting for 42% of new anonymous fraud tips.  Email was second at 26%, and Web-based/ online forms came in close-behind at 23%. Other intake methods like snail mail, fax and other made up the remaining 26%.   I’ve found that the preferred intake methods can vary depending on factors like what’s available to employees and how employees prefer to communicate.

As we move into an age of automation and software that helps bridge the divides and enhances older methods, there are still many organizations that only offer basic phone and email and some that only offer web-based/ online forms.   I’ve found that resource constraints or fear can drive compliance and HR professionals to limit the intake methods. I’ve seen the fear of change or the unknown hinder compliance programs’ ability to take root. Without the best tools, its difficult to grow a platform which matures with the company  and fundamentally connects with employees. I’m an advocate for “the more, the better.” Companies should give their employees as many options as possible. One-size fits all is not the right approach for compliance and HR department because not every employee is going to have the same communication preferences. Forbes wrote a great article, “Phone Calls, Texts Or Email? Here's How Millennials Prefer To Communicate” back in 2017 that discussed millennials’ aversion to phone calls and a strong preference for text messaging, email and other similar communications phone apps.  A variety of intake tools can help facilitate effective communication with not only millennials, but all employees.  These varying methods of anonymous access are  critical to the growth and success of a hotline/whistleblower compliance program.

Another crucial way to gather tips is to encourage a culture where  tips are reported in person. The ACFE’s report found that when the hotline wasn’t used, 32% of employees reported their tips/ concern to their direct supervisor, 15% to Executives. 13% to the Fraud investigation team, 12% to a coworker and 10% to internal audit.   I think it is a thing of beauty when companies have a culture that encourages speaking directly to managers or departments like Legal or Ethics & Compliance.  I know of one organization that has 80% of their reports come in directly to their Ombudsmen. This company still has a hotline phone number, email and web portal available to employees to help ensure they do not alienate the other 20%.   Another great practice this company has is leveraging a case management system to track all of their reports.  Regardless if employees report directly to their ombudsman or through the hotline web-portal, all issues, incidences, and tips are logged and investigated in the same centralized repository.  

While a simple anonymous whistleblower/hotline with  intake method is a start, as new generations enter the workforce, compliance and human resources department will need to adapt to generational styles and create open lines of communication across the organization.  Offering multiple intake methods will help ensure all employees have an accessible and culturally natural way to report their concerns.

I also strongly encourage organizations to collect tips/reports using all intake methods available to create a centralized case management system.  A secure and safe repository helps ensure all concerns are investigated consistently, and the organization has a full, un-siloed, view of ethics and compliance concerns and other risks.

Keep up with Ethix360 for more information on the challenges compliance, legal and HR professional face.

Stephanie Jenkins is the Chief Compliance Officer of ETHIX360.  At ETHIX360, our goal is simple, to provide an affordable, flexible and comprehensive answer to employee communication and case management on issues related to corporate ethics, code of conduct, fraud, bribery, environmental, health & safety, and workplace violence.  To learn more about ETHIX360, please visit, or follow us on twitter @ethix360.