Are Ethics Hotlines Less Hot Than They Seem? (And Other Flaws In Employee Reporting of Ethical and Legal Misconduct)

The recently released 2007 National Business Ethics Survey by the Ethics Research Center reports that employees in their sample were unlikely to use ethics hotlines to report observed misconduct. In fact, only 3% of their sample stated a preference to use an ethics hotline to report misconduct. In contrast, 44% of their sample stated that they would rather bring such matters to the attention of higher management and 43% preferred going to a supervisor.

None of this means that the use of ethics hotlines should be discontinued. After all, any available, functional opportunity for employees to report misconduct is worthwhile assuming that such reports lead to immediate and appropriate investigation. However, too many companies who set up ethics hotlines seem to believe that these lines will have far more impact than is actually likely. That would be fine except that they so often either skimp on the development of other avenues for reporting misconduct or on training employees on using the other existing processes. The logic in such cases is usually, “We have a hotline for reporting problems now so we’re obviously covered.” That is, to put it mildly, extraordinarily shortsighted.

Unfortunately, many employees are skeptical about the anonymity of hotline calls and, even more importantly, lack faith that a hotline report will actually lead to an investigation. Perhaps even more significant, though, is that many employees would simply rather speak about legal or ethical problems with someone they know rather than talking to an anonymous voice on the other end of a hotline service.

Ultimately, of course, what matters most is whether or not misconduct is reported to someone in a position to investigate. In the ERC sample, however, only 42% stated that they had reported observed misconduct and, from my experience, even that frighteningly low figure seems high.

On a possibly positive note, more than a third of the ERC sample stated that they would take matters into their own hands rather than go through official channels. That would, of course, lower the number of reports but simultaneously reduce the number of problems going without intervention. I would feel better about supporting that positive spin, however, if there was any way to assure that ‘taking matters into their own hands’ persistently led to an appropriate resolution of the problem. From my experience, though, I’m not at all sold that we can count on that.

To be clear, I think that informal peer-to-peer resolution of ethics concerns is always preferable if additional reporting or other intervention isn’t required by law or internal policies and procedures. However, until employees are given effective training on how to intervene – and then persistently reinforced for doing so – what passes for informal intervention is far too likely to be little more than a well-intentioned effort leading to little or no reduction in wrongdoing. Unfortunately from what I see over and over again, absent training and reinforcement, employees are likely to both overestimate their positive impact on co-workers and underestimate their potential to tolerate continued post-intervention transgressions. Related to the latter concern is that too many employees feel they have discharged their duty if they attempt to intervene informally although no change occurs. They need to be aware that an unsuccessful effort to intervene is a starting place rather than representing the end of their obligations to assure an appropriate investigation and resolution.

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