2019 Regional Whistleblowing Hotline Benchmark Report · 4 2019 Regional Whistleblowing Hotline...

2019 Regional Whistleblowing Hotline Benchmark Report1

2019 Regional WhistleblowingHotline Benchmark ReportData and analysis to help you benchmark your ethics and compliance programme against the world’s largest whistleblowing hotline and incident management database

Covering Europe, APAC, North America and South America

REPORT PREPARED BY:

Carrie Penman

Chief Risk & Compliance Officer, NAVEX Global

Ian Painter

Associate Director, EMEA Marketing, NAVEX Global

Raina Hathorne

Product Marketing Manager, NAVEX Global

Introduction 04

Executive Summary 05

A Snapshot of Our Database 06

Key Findings and Analysis 08

1. Report Volume per 100 Employees 08

2. Report Allegation Categories 12

3. Anonymous vs Named Reporters 16

4. Substantiated Reports 18

5. Case Closure Time 22

6. Reporting Intake Method 26

7. Reports of Retaliation 30

8. Reports of Harassment and Discrimination 32

9. Report Origination 34

Conclusion and Key Takeaways 36

How we Calculate our Benchmarks 37

About the Authors 38

Contents

2019 Regional Whistleblowing Hotline Benchmark Report 52019 Regional Whistleblowing Hotline Benchmark Report4

Introduction

Good analysis and benchmarking of whistleblowing hotline data helps organisations answer crucial questions about their risk and compliance programmes. Does the organisation’s culture encourage employees to raise concerns? Is the investigations process effective? Do employees need further training on how and what to report on?

Comparing internal data to help answer these questions is important but getting a perspective on how your performance matches up to industry norms is critical.

NAVEX Global has taken anonymised reporting data collected through our hotline and incident management systems, that together forms the largest database of whistleblowing reports in the world, to provide the benchmarks in this report. Organisations can use these benchmarks to compare the performance of their speak-up programmes to others operating in the same geographic region.

Each whistleblower report used in this benchmark has been categorised by the region where the company headquarters is based. That has allowed us, for the first time, to create individual benchmarks for each of the four global regions represented in this report; North America, South America, Europe and APAC.

Ethics and compliance professionals can trust our benchmarks to help guide decision making and to better understand how their programmes compare against their peers.

This report is an excellent starting point for organisations committed to benchmarking and improving programme effectiveness. To leverage more advanced benchmarks, NAVEX Global offers custom benchmarking options as part of our GRC Insights™ benchmarking services. You can work with us to get tailored benchmarking based on industry, size or other facets of your organisation. Learn more about this service on our website at www.navexglobal.com.

Executive Summary

Speak-up programmes continue to make significant financial and reputational impact

NAVEX Global has seen a significant increase in the number of organisations across the globe who are looking to develop their risk and compliance programmes. This is to some degree being driven by legislative trends and enforcement activities seeking to regulate ethical behaviour, notably around whistleblowing practices.

Organisations that develop strong reporting programmes that encourage employees to speak-up will have a greater positive impact on the financial performance of the business1 as well as improve the company’s reputation, retention and staffing, and community and customer relations. While these benefits drive organisations toward investing in improving reporting outcomes, many social, political, economic and cultural factors affect the environments in which they operate.

It is therefore important for programme owners and stakeholders to use geographic benchmarks to make more meaningful comparisons against organisations based in their own regions and move toward more accurate predictive risk mitigation.

Below we have highlighted some of the key results that our regional hotline benchmark report reveals.

• Overall reporting rates are significantly lower for organisations based in Europe and APAC with 0.5 reports per 100 employees and 0.6 reports per 100 employees respectively in 2018. This is well below the 1.5 reports per 100 employees seen in North America. South American organisations have an even higher reporting rate of 1.8 reports per 100 employees.

• European organisations experienced the lowest percentage of HR reports with 57% of all reports accounting for HR reports in 2017 and 60% in 2018. This compares with HR reports accounting for 74% of all reports for South American organisations in 2017 and 73% for North America in 2018. We also

see a lower percentage of reporting rates within the Accounting, Auditing and Financial Reporting category in these two regions.

• Inquiries account for 10%, or less, of all reports across all of the regions shown in this report apart from North America where the percentage of inquiries was highest at 18% of all reports in 2017 and 15% in 2018. These rates are considered low, even including the higher rates seen for North American organisations.

• Anonymous reporting rates are lowest for European organisations with 54% of all reports being made anonymously in 2018. This is to be partly expected due to the restrictions on anonymous reporting by regulators in this region.

• Case closure times are considerably higher for organisations based in Europe and APAC with a median of 81 days for APAC and 73 days for Europe. North American organisations are experiencing the shortest case closure times at 39 days. This is a significant regional difference that organisations should be aware of when requesting and allocating programme resources.

• There was a significant jump in the percentage of retaliation reports for European organisations from 0.2% in 2017 to 0.9% in 2018. Although this is a considerable increase in one year, North American organisations have comparatively higher retaliation rates at 1.2% in 2018.

• European organisations have had significantly higher reporting rates for harassment and discrimination reports, as a percentage of overall reports, compared with North American organisations. In 2018, 10% of all reports from European organisations were categorised as harassment and 7% of all reports categorised as discrimination. European organisations also had better substantiation rates for harassment reports at 47% in 2018 compared to 40% for North American organisations.

1. Strength in Numbers: Ground Breaking Evidence Proves True Compliance ROI

Trust NAVEX Global’s Risk and Compliance SolutionsNAVEX Global’s comprehensive suite of risk and compliance software, content and services helps organisations protect their people, reputation and bottom line. Trusted by 95 of the FORTUNE 100, 50 of the FTSE 100 and more than 14,000 customers, our solutions are informed by the largest risk and compliance community in the world.

www.navexglobal.com.

https://www.navexglobal.com/en-gb/resources/white-papers/roi-of-compliance-program-hotline-reporting


A Snapshot of Our Database

Reports from Around the WorldNAVEX Global Customers Generate The World’s Largest Database of Reports

Top 12 Industries

91%

1%

3%

North America

South America

APAC

that received 10 or more reports in 2018

2,738 customers

generated over 1 million reports in 2018 representing

Over 44 million employees

44M

Medians and ranges provide context for your individual benchmarks

Industry Leading Approach

We use Medians or Midpoints rather than averages to reduce the impact of outliers

The reports used in this benchmark are categorised by company HQ location. We then grouped them into four regions; North America, South America, Europe and APAC (we combined Australasia, Middle East and Asia to form APAC). Reports from Africa are omitted from this report.

We calculate ranges to help identify extreme data points as potential areas of concern

Administrative and

Support Services

Chemical

Manufacturing

Educational

Services

Finance

and Insurance

Health Care and

Social AssistanceInformation

Mining, Quarrying,

and Oil and Gas

Extraction

Miscellaneous

Manufacturing

Professional,

Scientific, and

Technical Services

Retail TradeTransportation

and Warehousing Wholesale Trade

Methodology

Our report reflects many issue types:

Our report reflects all intake methods:

0 5 10 15 20 25 30 35 40

0 10 20 30 40 50 60 70 80

HotlineWeb

Other

Accounting, Auditing & Financial Reporting

Business Integrity

HR, Diversity & Workplace Respect

Misuse, Misappropriation of Corporate Assets

Environment, Health & Safety

5%

Europe


1. Report Volume per 100 Employees

1 a. How Does Your Report Volume Compare to Others?

2017 Range 2018 Range Median

APAC0.1

0.1

3.6

4.2

0.6

0.5

Europe0.1

0.1

2.2

2.2

0.4

0.5

NorthAmerica

0.3

0.3

8.8

8.8

1.3

1.5

SouthAmerica

0.5

0.8

17.1

14.4

1.9

1.8

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Findings

• European organisations receive the lowest volume of reports per employee, followed closely by APAC organisations

• South American organisations have the highest volume of reports and also the largest range in report volume

Using Report Volume per 100 Employees enables organisations to compare the total number of reports submitted from all reporting channels – including web forms, telephone hotline, and all other channels.

Analysis

The factors relating to a lower reporting rate for European and APAC organisations are well documented. As well as cultural differences, there is a lack of awareness on how to report and what to report on, and legislation to protect employees who speak-up is not yet well established.

However, this situation is changing with comprehensive whistleblowing legislation recently announced for both Europe and Australia, as well as improved employment laws in several APAC countries. The new EU Whistleblowing Directive is significant as it requires all organisations based in the EU with more than 50 employees to establish confidential reporting channels, clear reporting processes and protect whistleblowers.

The high reporting rate for South American organisations is encouraging in a region where corruption has prevailed within many government bodies. Whistleblowing is partially protected in this region by both local and international law and a number of businesses have made significant investments to encourage reporting within their organisations.

Report Volume per 100 Employees


0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

APAC0.1

0.1

4.0

3.2

0.3

0.4

Europe0.1

0.1

1.6

1.9

0.3

0.2

NorthAmerica

0.2

0.3

5.3

5.0

1.0

1.1

SouthAmerica

0.5

0.7

15.6

17.4

2.0

2.6

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

APAC0.0

0.2

3.6

5.5

0.8

0.5

Europe0.1

0.1

2.3

2.3

0.5

0.5

NorthAmerica

0.4

0.5

12.7

11.5

1.8

2.1

SouthAmerica*

0.5

1.20

4.7

7.0

1.6

1.4

1 b. Impact of Using a Unified Incident Management System on Total Volume of Reports

2017 Range 2018 Range Median 2017 Range 2018 Range Median

The next two benchmarks compare the level of reporting received by two groups of organisations. The first group only tracks reports received from their telephone hotline and web reporting channels. The second group utilises their incident management system to also track reports from other mostly off-line channels (open-door reporting, manager submissions, direct email and letters) in addition to web and telephone.

By comparing the reporting volumes between these two groups we can determine the impact of using an incident management system in a more robust way.

Findings

• There is a substantial increase in reporting volume for organisations that track all three sources across every region

• Tracking reports from all three sources gives a more holistic picture of the cultural health of an organisation

Organisations who track reports from all three reporting channels; web, telephone and other sources, show higher volumes compared with organisations who track reports from web and telephone only. This is true for all regions apart from South American organisations which show a lower reporting volume for organisations using all three channels.

The largest percentage increase in reporting volumes is seen for APAC organisations in 2018 from 0.3 reports per 100 employees for organisations tracking reports from web and telephone only to 0.80 reports per 100 employees for companies tracking all three reporting channels.

Analysis

For a speak-up programme to be truly effective, employees must be offered relevant, accessible channels through which they can raise their concerns. The most common channels typically fall into three categories; telephone, web, and other. Only tracking web and telephone limits the ability to have a more holistic view of issues occurring across the organisation.

Tracking reports from other sources, such as open door reporting, not only provides a more holistic view on reporting behaviour but also allows organisations to better manage and investigate cases consistently and appropriately.

The lower reporting rates seen for organisations tracking all three channels for South America should be tempered by the fact that this outcome is based on a small data set.

Organisations That Track Reports from Web & Telephone Only Organisations That Track Reports from All Sources

*Small data set


2. Report Allegation Categories

2 a. Reports by Allegation Category

Findings

• The vast majority of all reports fall into the HR, Diversity and Workplace Respect category

• European organisations have the lowest percentage of HR reports and the highest percentage of Accounting, Auditing and Financial Reporting, closely followed by organisations in APAC

Our whistleblowing report data is organised into the five primary categories shown here, the definitions of which can be found in the 'How we Calculate our Benchmarks' section of this report. Categorising the types of reports an organisation receives, and tracking their numbers, can reveal programme gaps and successes.

The vast majority of all reports across every region fall into the HR, Diversity and Workplace Respect category. European and APAC organisations have a lower percentage of HR reports and a higher percentage of Accounting, Auditing and Financial Reporting.

Analysis

The lower percentage of HR reports seen from European and APAC organisations may be due to some organisations discouraging the reporting of these issues through their speak-up programme. In addition, certain HR issues, such as personal grievances, may not always qualify as a protected disclosure and can be directed to an independent reporting channel via a separate grievance policy.

The higher percentage of accounting and financial reports seen for European and APAC organisations may indicate that some organisations are encouraging employees to report on these issues due to increased legislation and regulatory scrutiny in this category.

The EU Whistleblowing Directive will require organisations to protect reporters across a wide range of issues including public procurement, financial services, money laundering, terrorist financing, product safety, public health, and protection of privacy and personal data; in essence any potential violation of EU law that qualifies. Organisations may need to extend their reporting system to accept an increase in both issue types and overall reporting volume.

Business Integrity

23% 21% 22% 22%

15% 15%24% 22%

HR, Diversity and Workplace Respect

60% 63%

57% 60%70% 73% 74%

62%

Environment, Health and Safety6% 8% 6% 6% 6% 6% 7% 8%

Misuse Misappropriation of Corporate Assets7% 7% 6% 6% 6% 5% 6% 6%

Accounting, Auditing and Financial Reporting5% 4% 4% 5% 2% 2% 2% 2%

APAC Europe North America South America

Median Percentage of Reports by Category

2017 2018

Note: Medians will not necessarily total 100%


2 b. Industries with the Highest Median Reporting Rate per Allegation Category 2 c. Reporter Allegations vs. Inquiries

Findings

• Industries that demonstrate high risks for certain issues dominate the highest median reporting rates for EMEA & APAC organisations

• Transportation, Warehousing and Manufacturing most frequently have the highest reporting rates

We reviewed the data to determine which industries received the highest reporting rate in each category for organisations headquartered in EMEA and APAC. Sectors that demonstrate high risks for certain issues dominate as the industries with the highest reporting rates by allegation category for EMEA & APAC organisations. Transportation, Warehousing and Manufacturing are most often cited as the industries with the highest median reporting rates.

Findings

• Inquiries form 10%, or less, of all reports for every region apart from North American organisations

• Organisations are missing an opportunity to gain additional compliance insight by not capturing inquiries

Reports raised by employees can be categorised as either allegations or inquiries. Allegations are important for organisations to capture through an incident management platform so that any concern or incident can be investigated before it turns into a crises. Inquiries are also important as they can highlight a lack of understanding over a policy or where additional training may be required.

Inquiries form 10%, or less, of total reports for all regions, apart from North American organisations with 18% of inquiries in 2017 falling to 15% in 2018.

Analysis

All organisations, especially those outside of North America, should work to capture more inquiries within their reporting system by including options such as ‘ask a question’ and by increasing awareness of this source of advice. Organisations that do not, are not only missing out from tracking trends that may indicate gaps in their compliance programme, but also an opportunity to provide compliance and ethics advice that may reduce future issues from occurring.

2017 2018 2017 2018

Allegation

Inquiry

93%

7%

90%

10%

82%

18%

92%

8%

93%

7%

91%

9%

85%

15%

90%

10%


Industries with the Highest Median Reporting Rate per Category for EMEA & APAC

Reporter Allegations vs Inquiries

Misuse Misappropriation of Corporate Assets

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Accounting, Auditing and Financial Reporting

Mining, Quarrying, and Oil and Gas Extraction

Wholesale Trade

13%

7%

Environment, Health and Safety

Transportation and Warehousing

Chemical Manufacturing

20%

14%


Utilities

Miscellaneous Manufacturing

78%

75%

Business Integrity

Transportation and Warehousing33%

32%

Machinery Manufacturing

Transportation and Warehousing

20%

17%

Information/ Construction

2019 Regional Whistleblowing Hotline Benchmark Report 17


100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

3. Anonymous vs Named Reporters

3 a. Median Anonymous Reporting Rate

Findings

• European organisations have the lowest anonymous reporting rates and APAC has the highest rates

• It is interesting to note that European and North American organisations have similar anonymous reporting rates

The Anonymous Reporting metric shows the percentage of all reports submitted by individuals who chose to withhold their identity when making a report. Reporters typically withhold their name due to uncertainty that exists around the speak-up process, a fear of retaliation, or a desire to not be involved in the investigation.

European organisations show the lowest level of anonymous reporting with 52% in 2017 and 54% in 2018. In contrast, APAC shows the highest rates with 76% for 2017 and 73% for 2018.

Analysis

There may be several reasons why global regions show different anonymous reporting rates. Some organisations actively discourage anonymous reporting and there have been some cultural issues around anonymous reporting in various parts of the world. High rates of anonymous reporting can also be linked to a lack of trust within the speak-up process.

However, the negative perception surrounding anonymous reporting is diminishing. Since the beginning of 2019, both Australia and Spain have lifted restrictions on anonymous reporting. And while the new EU Whistleblowing Directive does not specify how member states should treat anonymous reporting, it is likely many states will adopt a more progressive, unrestricted approach.

2017 2018

76%

73%

52% 54% 56% 57%

65%

72%

Median Anonymous Reporting Rate


100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

4. Substantiated Reports

4 a. Median Substantiation Rate

2017 2018

Findings

• North American organisations have the lowest substantiation rates and South American organisations have the highest substantiation rates

• It is interesting to note that here again European and North American organisations show similar rates

The Overall Substantiation Rate reflects the rate of allegations from both named and anonymous reporters that were determined to have at least some merit to them, termed as substantiated or partially substantiated.

North American organisations have the lowest substantiation rate at 42% for both 2017 and 2018 and South American organisations show the highest substantiation rates at 57% in 2017 and 50% in 2018.

Analysis

The data for South American organisations shows that the quality of reports does not diminish when reporting volumes are high and that other factors such as training, awareness and trust may have a bigger influence on the quality of reports made. We also see a high substantiation rate for anonymous reports for South American organisations later in this report.

Substantiation rates are often used by organisations as a measure of the effectiveness of their speak-up programme. They can reveal how well employees understand the nature and purpose of the programme but also provide insights into how effective the organisation’s code of conduct and investigation processes are.

57%

50%52%


46%

42%43%47%

42%

Median Overall Substantiation Rate


Accounting, Auditing and Financial Reporting

Business Integrity


Environment, Health and Safety

Misuse Misappropriation of Corporate Assets

North America

50%

50%

50%

40%

40%

47%

50%

50%

50%

50%

Europe

50%

50%

50%

39%

43%

50%

47%

47%

65%

58%

APAC*

50%

57%

40%

49%

40%

58%

57%

78%

2017 2018

4 b. Median Substantiation Rate by Allegation Category 4 c. Substantiated Anonymous vs. Named Reports

Findings

• Misuse and Misappropriation of Corporate Assets has the highest substantiation rates for European and APAC organisations

• HR, Diversity and Workplace Respect has the lowest substantiation rates across all regions

Misuse and Misappropriation of Corporate Assets has the highest substantiation rate for both APAC and European organisations across all allegation categories. HR, Diversity and Workplace Respect has the lowest substantiation rate across all regions.

Although the HR substantiation rates are the lowest across all allegation categories, they are still close to 40%, or above, for every region. Organisations sometimes perceive HR reports as a problem area, concerned they may be inundated with malicious, false, and frivolous reports from employees. This data shows that this concern is not warranted for any region.

Findings

• European organisations show the largest percentage increase from anonymous to named substantiation rates

• South American organisations have the highest substantiation rates for both named and anonymous reporting

All regions show a better substantiation rate for named reports than for anonymous reports, apart from South American organisations where a higher substantiation rate for anonymous reporting was seen in 2017. South American organisations also have the highest substantiation rates for both named and anonymous reporting. European organisations demonstrate the largest increase from anonymous substantiation rates compared to named substantiation.

Analysis

Research shows that reporters typically withhold their identity due to a fear of retaliation or a desire not to be involved in the investigation process, rather than an unfounded belief that anonymous reports are frivolous or deliberately false. The drop in substantiation rates we see for anonymous reporting is therefore more likely due to factors such as anonymous reports being discounted or less resources made available to follow-up and investigate them.

The levels of substantiation that we see across all regions provide a strong argument against those still clinging to old biases against anonymous reports. These benchmarks provide a good justification to double-down on efforts to boost anonymous follow-up activity especially as incident management platforms allow organisations to communicate with a reporter even when they choose to remain anonymous.

Named Substantiation

59% 53%

South America

46% 46%

North America

54% 52%

Europe

50% 51%

APAC

2017 2018

Anonymous Substantiation

South AmericaNorth AmericaEuropeAPAC

48% 55%35% 34%43% 45% 34% 33%

Median Substantiation Rate by Category

Comparison of Substantiation Rates Between Anonymous & Named Reporters


*Accounting, Auditing and Financial Reporting data set is too small to show a result for APAC


Findings

• Case closure times are above 70 days for European and APAC organisations

• North American organisations take considerably less time to close cases compared to other regions

Case Closure Time measures the number of calendar days it takes an organisation to close a case. Organisations in Europe and APAC show case closure times well above 70 days. North American organisations, in contrast, take considerably less time with case closure times of around 40 days.

Analysis

This data shows that compliance teams in Europe and APAC may not have the resources they need to investigate reports in a timely manner. In comparison, North American organisations may have more resources and make better use of technology to close more cases quickly.

A case closure time of 30 days is generally considered as best practice. Note that these findings are medians which means that 50% of the cases are taking even longer to close.

Reducing case closure times is a vital step towards increasing employee engagement and trust in your speak-up programme. Make sure your employees see that their reports are being treated as a matter of urgency by responding quickly and resolving them within a shorter time period.

5. Case Closure Time

5 a. Median Case Closure Time in Days

2017 2018

APAC72

81

Europe

81

73

NorthAmerica

41

39

SouthAmerica

60

40

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90Days

Case Closure Time in Days


Findings

• Case closure times are generally shorter for named reports than for anonymous reports across all regions

• European organisations take the longest time to close cases for both anonymous and named reports

For European, APAC and South American organisations, anonymous reports take significantly longer to close compared with named reports. For North American organisations the difference between anonymous and named median case closure times is a much smaller difference of only four days.

Analysis

North American organisations are leading the way for case closure times. When we consider this data alongside the other benchmarks in this report, the overall picture suggests that organisations in Europe, APAC and South America may not be resourcing their investigations teams appropriately or affording the right level of attention to following up with anonymous reporters.

5 b. Median Case Closure Time by Anonymous vs. Named Reporters

Europe

SouthAmerica

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90Days

Case Closure Time in Days by Anonymous vs Named Reporters

71

79

42

59

61

72

38

81

82

40

49

69

72

36

38

APAC

Anonymous

Named

Anonymous

Named

NorthAmerica

Anonymous

Named

Anonymous

Named

62

2017 2018

6. Reporting Intake Method

6 a. Report Intake Method Comparison

2017 2018

Telephone Hotline Web Submission All Other Methods

Note: Percentages may not total 100% due to rounding.

Findings

• All regions show a good take-up for each of the three types of reporting channels

It is important to provide employees with a choice of communication channels to make a report. Offering a variety of options such as telephone, web and other methods, such as open-door conversations, allows employees to choose the communication method they prefer and trust.

Web submissions are a popular method for reporting concerns, especially for APAC and South American organisations. In contrast North American organisations are more reliant on telephone and other methods of reporting, such as open door communications, while European organisations show a consistent level of usage across all three reporting methods.

Analysis

Organisations have an opportunity to capture more walk-in reports, by developing an open door reporting policy and by providing management with the ability to submit reports into the organisation's incident management platform, and to improve overall reporting levels. However, for all organisations, and particularly where we see higher anonymous reporting rates, such as for APAC and South American organisations, instances of retaliation, or a lack of trust in the reporting system, can cause reporters to remain anonymous and shun open door reporting channels.

We also see strong engagement levels across all reporting channels for every region. This data shows how important it is for organisations to provide a range of channels that employees can choose from to make a report.


South America

61%

55%

13%

24%

26%

21%

Europe

35% 38%

38% 37%

27%25%

APAC

52% 49%

24% 27%

24% 24%

North America

23% 24%

38% 39%

38% 37%

Report Intake Method Comparison


6 b. Median Substantiation Rate by Intake Method

Findings

• Substantiation rates are highest for All Other Methods of reporting across all regions

Reports received via All Other Methods continue to be substantiated at a median rate significantly higher than reports received via telephone and web intake methods.

This finding highlights the value of capturing open door reports. By establishing a speak-up programme where all reports, including open door reports, can be tracked in the same incident management system will allow organisations to detect and address a higher volume of concerns as early as possible.

2017 2018

Telephone Hotline Web Submission All Other Methods

Substantiation Rates via Report Intake Method

APAC Europe North America

59%67%

61%

53% 58% 60%

All Other Methods

100%

80%

60%

40%

20%

0%


48%

38%

31% 34% 35% 34%

Telephone Hotline

100%

80%

60%

40%

20%

0%


46%

41%36% 40%

36% 37%

Web Submission

100%

80%

60%

40%

20%

0%


1.3

1.2

1.1

1.0

0.9

0.8

0.7

0.6

0.5

0.4

0.3

0.2

0.1

0Substantiation Rate

Europe North America

0.2%

0.9%

40% 25%

1.1%

1.2%

20% 22%

7. Reports of Retaliation

7. Percentage of Retaliation Reports

Findings

• There was a significant jump in the percentage of retaliation reports for European organisations in 2018

• North American organisations have comparatively higher retaliation rates but lower substantiation rates

European organisations show a significant jump in retaliation reporting rates from 0.2% in 2017 to 0.9% in 2018. While the median reporting rates for retaliation have increased for both European and North American organisations, the substantiation rates have fluctuated and are lower for this reporting category compared to overall substantiation rates.

Based on research on the number of employees who say in surveys that they have experienced retaliation, organisations in every region should expect to see more reports of retaliation.

Analysis

Retaliation continues to be one of the top reasons employees cite for not reporting known or suspected wrongdoing. Low rates of retaliation reports highlights an opportunity for ethics and compliance teams across all regions to improve in this area.

Although whistleblowing legislation is in place in some countries, it has not always been matched with effective measures to protect reporters against acts of retaliation. Therefore, to encourage more reporting and to stop reports of retaliation going externally to regulatory agencies, organisations should address the need to define, raise awareness of, and train employees and senior management on how to reduce and manage instances of retaliation.

Raising awareness of whistleblower protection can also lead to more reporting. It will be interesting to see if the EU Whistleblowing Directive affects the level of both retaliation reports and overall reporting rates in Europe.

2017 Reporting Rates 2018 Reporting Rates

2017 Percentage Substantiated 2018 Percentage Substantiated

Percentage of Retaliation Reports


8. Percentage of Harassment & Discrimination Reports

8. Reports of Harassmentand Discrimination

Findings

• European organisations saw nearly double the levelof harassment and discrimination reports

• European organisations also saw higher substantiationrates for both harassment and discrimination reports

There has been significant interest surrounding the levels of harassment and discrimination reporting due to the emergence of the #MeToo movement and high-profile cases centered on these topics.

Harassment reports make up 10% of all reports for European organisations in 2018 and 6.8% for discrimination reports in the same year. These rates are higher than the rates we see for North American organisations where they make up between 3.7% and 5.1% of all reports for 2018.

Analysis

Compared to North America, anti-harassment and discrimination law is inconsistent in Europe for both the risk of litigation and the penalties imposed. Despite this, European organisations show stronger reporting trends around these issue types than North American organisations.

These findings serve as a reminder that the #MeToo movement has become a global phenomenon and indicates a growing inclination for employees to speak-up on these concerns. Organisations need to acknowledge that there is a fundamental shift in employees’ willingness to tolerate harassment.

2017 Reporting Rates 2018 Reporting Rates

2017 Percentage Substantiated 2018 Percentage Substantiated

Percentage of Harassment Reports


APAC Europe

10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0%

9.1%

10%

45% 47%

4.8% 5.1%

37% 40%

Percentage of Discrimination Reports


10%

9%

8%

7%

6%

5%

4%

3%

2%

1%

0% 27% 29% 25% 28%

5.8%

6.8%

3.4% 3.7%


9. Report Origination

2017 2018

North America

82.2% 82.5%

Europe

3.2% 3.9%

South & Central America

4.0% 4.5%Africa

1.3% 1.4%

Australia

0.7% 0.7%

Asia

8.6% 7.0%

9. Report Origination Breakdown by Geography

Findings

• North America shows the highest report volumes byreport origin

As organisations continue to see larger and wider geographical footprints, we continue to receive requests for more detailed benchmarking by geography. This data shows where the reports originated across our database. This should not be confused with the rest of the data provided in this report which is based on reports made by HQ location, rather than where the reports were submitted.

Percentage of Reports by Origin


Below are our recommendations, based on the key insights from this report, to help risk and compliance functions continually improve and develop their speak-up programme.

Gain board level commitment to speak-up and reporting programmes

Creating a strong “tone from the top” is critical in generating an ethical organisational culture from the top down. We encourage organisations to use the benchmarks in this report to demonstrate the true ROI that speaking-up can have on the financial performance of the business.1 In addition, directly involve the board with your reporting programme and the communications promoting the importance of speaking-up.

Regularly review whistleblowing training and awareness activities

Overall reporting rates remain low for organisations based in Europe and APAC. We recommend these organisations undertake regular employee activities and training about how to report, what to report on, and the protective measures in place for those who speak-up. This will give organisations an opportunity to increase reporting rates and gain greater visibility over the risks they face.

Although it is common for organisations to undertake an initial launch on their speak-up programme, and to include 'how to report' information during the employee onboarding process, there are significant benefits for those organisations who also undertake ongoing awareness activities and regularly refresh their programme communications.

Track reports from a range of intake channels

The benchmarks in this report show that reporting levels increase dramatically across all geographic regions when employees are given alternative methods to report a concern outside of telephone and web channels. This gives employees a wider choice to report via a method they feel most comfortable with.

Organisations should encourage employees to report directly to management, or to a nominated whistleblowing champion, as this provides a more complete picture of the organisational culture by tracking the level of open door reports.

Focus on decreasing case closure times

Case closure times for European and APAC organisations are significantly longer than those seen in the Americas. New legislation, such as the EU Whistleblowing Directive, will increase the pressure on organisations to adequately resource the investigations process. We recommend providing regular case closure metrics to familiarise the board with this issue, educate them on the risks associated with long case closure times and use anonymised success stories to demonstrate the positive impact of closing cases quickly and effectively.

Encourage employees to see your hotline as an information resource

North American organisations is the only region in our report where inquiries (as opposed to allegations) account for more than 10% of all reports made. This suggests an untapped potential for organisations to leverage greater insights from their incident management platform. Extending reporting systems to enable employees to ask questions and seek guidance can help organisations identify training gaps, spot emerging threats, and reduce potential future issues from occurring.

Conclusion and Key Takeaways

For statistical accuracy, our analysis includes only those organisations that received ten or more reports within a calendar year. To remove the impact of outliers that might skew the overall reporting data, we carefully calculated benchmarks for each organisation and then identified the median (midpoint) across the total for each region. This reporting methodology allows us to create a clearer picture of what is actually happening in our clients’ organisations as well as to provide you with benchmarking data that is not skewed by organisation size.

All information gathered was anonymised and aggregated without the need to access any personal or identifiable information contained within the data and in accordance with all applicable data protection laws.

Below are the methods of how each of the key benchmarks presented in this report were calculated:

1. Volume per 100 Employees - take the totalnumber of unique contacts (incident reports, allegationsand specific policy inquiry questions) from all reportingchannels received during the period, divide that numberby the number of employees in your organisation andmultiply it by 100.

2. Report Categories - ensure that each report isplaced into one of the five report allegation categoriesshown below. Then, divide the number of reports in eachof the five categories by the total number of reportscreated during the reporting period.

3. Anonymous vs Named Reporters - dividethe number of contacts submitted by a reporter who withheld their identity by the total number of contacts received.

4. Substantiated Reports - divide the number of allreports that are fully or partially substantiated by the totalnumber of reports that were closed as substantiated,partially substantiated, and unsubstantiated.

5. Case Closure Time - first calculate the number ofdays between the date a case is received and the date itis marked closed. Calculate for each case closed duringthe reporting period. Then, calculate the case closuretime by dividing the sum of all case closure times by thenumber of cases closed in the reporting period.

6. Reporting Intake Method - group all non-telephone hotline and non-web reports (like opendoor, email, postal mail, fax and manager submissions)together as “All Other Methods,” and then tally up thenumber of reports received by each method and divideby the total number of reports.

7. & 8. Reports of Retaliation, Harassmentand Discrimination - take the number of retaliation,or discrimination, or harassment reports made as the primary allegation and divide that by the total number of reports.

9. Report Origination - first, identify the countrylocation for each report, then categorise that country bycontinent. To determine the report distribution, dividethe total number of reports from each continent by thetotal number of reports received.

How we Calculate our Benchmarks

1. Strength in Numbers: Ground Breaking Evidence Proves True Compliance ROI

Categories of reports used

1. Accounting, Auditing and Financial Reporting(i.e financial misconduct, internal controls, expense reporting)

2. Business Integrity (i.e bribery, falsification of documents, fraud, COI, vendor/customer issues, HIPAA, GDPR)

3. HR, Diversity and Workplace Respect(i.e discrimination, harassment, compensation, general HR and cases marked as "other")

4. Environment, Health and Safety(i.e EPA compliance, violence, safety, substance abuse)

5. Misuse, Misappropriation of Corporate Assets(i.e employee theft, time clock abuse)

https://www.navexglobal.com/en-gb/resources/white-papers/roi-of-compliance-program-hotline-reporting)

https://www.navexglobal.com/en-gb/resources/white-papers/roi-of-compliance-program-hotline-reporting


About the Authors

Carrie Penman Chief Risk & Compliance Officer, NAVEX Global

Carrie Penman is the Chief Risk & Compliance Officer for NAVEX Global. Carrie has been with NAVEX Global since 2003 after serving four years as deputy director of the Ethics and Compliance Officer Association (ECOA).

Carrie was one of the earliest ethics officers in America. She is a scientist who developed and directed the first corporate-wide global ethics programme at Westinghouse Electric Corporation. Since joining NAVEX Global she has conducted numerous programme and culture assessment projects for its clients and regularly works with and trains company boards of directors and executive teams. Winner of the ethics and compliance initiatives’ Marshall Award for innovation in corporate ethics, Carrie also serves as a corporate monitor and independent consultant for companies with government agreements.

Carrie is the author of numerous compliance related articles and commentary and is regularly quoted as a compliance expert in press and publications including the Wall Street Journal and Compliance Week.

Ian PainterAssociate Director, EMEA Marketing, NAVEX Global

Ian Painter is Associate Director, EMEA Marketing for NAVEX Global. A business graduate, Ian started his career in marketing communications with some of the world’s leading high-tech brands.

Ian has authored many blogs, white papers and reports discussing best practice recommendations for businesses based in EMEA & APAC on topics including whistleblowing, sexual harassment, information and policy management, data privacy and third party risk. He has also conducted several market research projects on business, regulatory and compliance programme trends for European organisations.

As well as presenting at European compliance events, Ian has established NAVEX Global's risk and compliance roundtables and networking conferences that are free to attend for the risk and compliance community, now in its fifth year.

Raina HathorneProduct Marketing Manager, NAVEX Global

Raina Hathorne is the Product Marketing Manager for NAVEX Global’s EthicsPoint® and GRC Insights™ solutions for managing, tracking and analysing employee reports of potential wrong doing.

In addition to her product marketing responsibilities, Raina is responsible for the complex data analysis that builds NAVEX Global's global and regional whistleblowing hotline benchmark reports which included over 1 million individual reports this year. Throughout the year, Raina also leads the team that develops and delivers custom industry benchmarking reports to NAVEX Global customers through the GRC InsightsTM process.

Prior to obtaining an MBA from Oklahoma State University, Raina was an educator and spent two years in China with the Peace Corps. She is passionate about finding customer-focused solutions and believes in the power of integrity to build a more equitable world.

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