Having high-quality metrics for reporting (KPIs) that capture useful data collected from your whistleblower program can help measure the effectiveness of the whistleblowing process and ensure it remains effective. There is growing global pressure to motivate businesses to conduct responsible and ethical activities, and an increase in recognizing the impact organizations can have on worker and consumer rights. Measuring the effectiveness of a whistleblowing program should include having strong metrics for reporting (KPIs) and basic management metrics. These are the must-have whistleblowing KPIs you should consider for reporting.
3 Must-Have Whistleblowing Reporting Metrics (KPIs)
The European Union Agency for Fundamental Rights (FRA) reports one whistleblower who worked for a shoe soles manufacturer in Cyprus disclosed the company had released potentially cancerous emissions in the environment between 1976 and 2009. This had caused more than 44 residents and employees to develop various forms of cancers and die from their exposure to these toxic emissions. If the company’s management had provided this whistleblower with a means of reporting wrongdoings sooner, it’s conceivable that some of these illnesses and deaths could have been avoided.
Here are three must-have metrics you should be tracking to ensure compliance with your whistleblowing program and ensure wrongdoings are flagged early on:
1. How many of your whistleblowing reports reveal legitimate misconduct?
To measure this, you should track the percentage of reports that are not misconduct related and those that are. If the number of unrelated reports is high, you should consider whether employees clearly understand what they should be reporting and what is considered misconduct.
2. How often are status updates being given to the whistleblower?
This metric captures the number of times updates are provided to a whistleblower during the course of an investigation. Frequent engagement with employees who disclose misconduct shows your whistleblower program is strong. On the other hand, infrequent status updates can indicate the company’s tendency not to follow up on disclosures of wrongdoing.
3. How quickly does your business respond to a whistleblower once a report is received?
This metric should capture the time between the initial whistleblower’s report and when you send a message in response, as well as subsequent responses to follow up messages. You should compare this whistleblowing metric quarterly and annually to ensure your response time doesn’t get slower over time.
3 Key Management Metrics
While having high-quality metrics that capture whistleblower program activities is an important element of responsible business. Managers’ response to disclosures are just as crucial. You should ask yourself the following three questions when assessing your managers’ ability to respond to reports of wrongdoing.
1. Are managers properly collecting data, keeping track of trends, and taking action on frequent or serious whistleblower reports?
Ensure managers are tracking statistics and receiving accurate data that consistently captures important KPIs. This is an important way for the business to stay informed about the whistleblowing program and any reported misconduct.
2. Do board members and senior management get to see and discuss the results of your program reporting?
You should share important data points on KPIs with board members and senior management in the form of a quarterly update. This will help ensure high risk cases are exposed, discussed, and remedied.
3. Is the company following up on the reports they receive and taking action?
As managers received reports and share updates with board members and senior management, they should be providing insights and recommendations about which actions to take. When tracking and statistical analysis reveal whistleblowing program trends, decisions and actions should be made according to these and progress reports should be given each quarter.
Developing a High Quality Framework
Having a high quality whistleblowing program can be an effective tool for mitigating financial risk and potential harm to employees and others. Internal whistleblowing report volume is associated with fewer government fines and lawsuits, and developing a high-quality whistleblowing framework means including the following elements:
- Providing confidential reporting channels to employees.
- Actively encouraging employees to speak up when they see misconduct.
- Protecting people who disclose misconduct from retaliation by having transparent investigation procedures.
- Introducing a response system that works, is timely, and is independent.
While your framework and metrics are important, Harvard University researchers Kyle Welch and Stephen Stubben say you should also consider that your reports may not be telling you the whole story. Welch and Stubben studied over 2 million whistleblower reports and observed that secondhand whistleblowing is 50% more credible and substantiated than firsthand ones. Their study also showed an increase in the volume of internal whistleblowing over time doesn’t always indicate an increase in fraud or wrongdoing. It can be the result of encouraging employees to speak up and effectively managing investigations of these reports.
Improving Whistleblower Program Performance
“More issues reported is a good thing,” Welch and Stubben say. Companies with more complaints from whistleblowers will likely see their credibility increase as they develop a strong reporting framework. When reviewing the data you collect, you should identify any patterns or trends over time and consider whether these reports are second hand or firsthand. If reports have increased, this may be an indication that your framework is working well and employees feel comfortable disclosing information.
To improve your whistleblower program performance and ensure the process has been communicated clearly to employees, there are several actions you can take. Begin by having informal and formal chats with employees, asking them if they’ve heard of the program and how they understand your whistleblowing policy. Ask them if they know what type of misconduct they should be reporting. This will identify knowledge gaps and allow you to gather information you can use to improve communication about the program. Examples of misconduct include ethical or safety violations that put the business, other employees, or the public at risk.
Produce clearly written materials such as posters or digital communication that outline what the program does, what misconduct looks like, how employees can file their reports, and what options they have should they choose to disclose something. Developing a training session to introduce these key program elements, and holding annual refresher sessions, will address any gaps in knowledge you identify among your employees. During these sessions you can measure their level of understanding of the whistleblower process and share new information with them.