Posts in Audit
H is for Hot Line
h is for hot lineCopyright © 2018 by Barney Rosenberg President, Ethics Line, LLC™

Some people in the ethics field are very fussy about what we call our “hot lines”.  They have their reasons, I’m sure.  The range of choices is:

  1. hot line;
  2. call line;
  3. ethics line; and
  4. help line to you name it. No, really, you name it and let us all know if you are aware of others, please.

The system I am most familiar with operates like this.  These are the key things I look for in assessing how well any “hot line” works.  It may be a good checklist:

  1. How do people even know about the “hot line”? The usual ways are posters in all the facilities; references in the company’s ethics policies; and reminders during training.
  2. Internal Audit is tasked with making sure that the posters are placed prominently while they are on-site conducting their financial audits.
  3. Employees and people outside the company are free to call. They are encouraged to raise questions or concerns.  It can simply be “I don’t understand X.  Can you help me?” or “Such and such is happening and it’s wrong/illegal.”
  4. People are encouraged to call if they don’t feel comfortable speaking to someone face-to-face where they work. We can only solve problems that we know about.
  5. An independent, external service provider, based in Europe, with truly global reach, handles the incoming, toll-free calls and/or the web-based service for online questions or concerns.
  6. Their services are available 24/7, 365 days a year…even the extra day in February during leap years.
  7. Their system can recognize the country in which the call originated and they can have a translator available, live, in a matter of a few minutes, if English is not the caller’s first language.
  8. The caller has the option to remain anonymous or provide their name and contact information. If they choose to remain anonymous, an investigation may be a little harder but the operators are trained to get enough information so that the company can conduct a proper investigation.
  9. Anonymous callers are given a unique case number so that they may call back for feedback.
  10. They are told to call back in 4 weeks, by which time it is expected that the company will have findings and recommendations.
  11. All calls are managed centrally in the company and all reports are transcribed and sent to the senior ethics officer who decides who should investigate and report out.
  12. If there are concerns raised about the person who would typically investigate, the senior ethics officer may select someone from outside that business or even outside the division of the company, to assure objectivity and independence.
  13. If, heaven forbid, there should be a complaint about the senior ethics officer, that officer is by-passed and the written report is sent to that person’s manager.
  14. Generally, the investigation and follow up is conducted at the business location by the site’s Ethics Coordinator. In some companies they are called Ethics Ambassadors.  They are the embodiment of the company’s ethics program and are also available to help with training and to generally point people in the right ethical direction.  They have other, full time jobs at the site.
  15. Confidential information, such as HR actions in response to the investigation, are not disclosed. Instead, the caller is told whether their allegations were confirmed or not; that appropriate action was taken; and that they should expect to see results at their work location.
  16. They are thanked for calling and invited to call again if the circumstances don’t improve.
  17. They are reminded that the company does NOT permit retaliation for calling the service.
  18. The company maintains a database of all calls and can generate reports based on the nature of the complaint; the business location involved; the division to which the business reports; the number of cases open and under investigation; and the country involved. Pie charts and all!
  19. On occasion, new policies are required to correct a situation that may extend beyond one location.
  20. An employee engagement survey will give you some insight into how well your system is working.

Your turn.  Care to share how your company does it…if you do?  Thank you.

A is for Audit

This is as good a place as any to begin our scan of the ethics alphabet.  Audit and awareness.  Unless we look closely at the impact of our ethics programs, policies and procedures, we are flying blind. There are two basic kinds of audit: internal and external.  Think about how your organization approaches each one. A global company I know very well has a robust set of policies and procedures for its domestic and international operations.  High on the list of ethics priorities is how they manage the shark-infested waters of international intermediaries – sales representatives and distributors.  They can’t be everywhere so why not get some sales help with the selection and management of intermediaries?  Key is to understand the law in the foreign jurisdiction and the corruption risk in that territory.  Document the full terms and conditions of the written agreement.  Make sure you can disengage when necessary.  I wrote the policies for that company.  It’s a challenge, as you know.  Some agreements had been in place for 20 years and no one had looked at them since they were executed! We developed a robust audit protocol to make sure each business understood the serious risks before proceeding; that they documented each step in the process; that they engaged in a cross-functional, step-by-step cautious approach; and that the Legal team was involved along the way.  Checklists were designed and used.  Senior level review was a must.  And performance by the intermediary was carefully considered before renewal.  Keep in mind that in some jurisdictions you must pay substantial fees to disengage from an intermediary.  You may quote me on this:  “Team in haste and repent in leisure!” We engaged outside legal to audit our businesses.  Together, we sent surveys to local company leaders, testing their Awareness of the company’s policies and procedures.  Those surveys were the basis for on-site interviews and helped form a picture of the audit report.  All elements of the report require follow up to completion.  And internal audit helps with the follow-up.  Good teamwork all around. Someone in your organization will ask the obvious question.  Outside counsel are so expensive and their hourly rates are through the roof.  Can’t we do this ourselves?  The answer is you can.  You shouldn’t because the outside expertise gives you a measure of insulation when the regulators/prosecutors come knocking.  It’s not an insurance policy but it can’t hurt and it can be a big help.  I started my career as a white-collar criminal defense lawyer/barrister.  Here’s a little secret:  most law firms will work with you on the fees.  They will negotiate fixed rates for discreet projects. And the deals can be even better if you can commit to repeat business for their firm. In one case, the intermediary was found to be forging company invoices in order to pass on costs to the country national customer!  The aftermath was not pretty.  One thing is certain, they never worked on behalf of the company again! Where will you draw the line?