We still hear a lot of talk about the reliability of second-hand information in relation to the Trump whistleblower. In November, a study of data from whistleblower reports filed at more than 1,000 companies found it very reliable. Secondhand reports are “47.7% more likely than firsthand reports to be substantiated by management, which suggests that management views many secondhand reports as credible.“
Whistleblowing stories are all over the news. Some observers have attributed this to a systemic change in society. There are more stories about whistleblowing, the argument goes, because there are more crimes to report.
However, rather than an increase in criminal activity, we may instead be observing an increase in the willingness of employees to speak up
The researchers looked at anonymous data from NAVEX Global, which runs employee hotlines for some of the world’s largest companies.
Our study of the data led us to two important findings: First, whistleblowers are crucial to keeping firms healthy. The average manager seems to take these reports seriously and uses them to learn of and address issues early, before they evolve into larger, more costly problems. We also found that second hand reports are more credible and more valuable, on average, than firsthand reports.
Companies that have a higher volume of complaints from whistleblower hotlines report fewer lawsuits and smaller legal settlements, they found. The HBR piece quotes Daniel Garen of Pivot Point Compliance Management. He says employee hotlines “have been the single greatest source for uncovering problems at the organizations I have worked with.”
Unless they are used against employees, he noted. Some lawyers advise whistleblowers to seek outside counsel first and approach company hotlines with care. The program’s aim is to protect the company, not the whistleblower, creating a built-in conflict of interest.
“Nothing will destroy a hotline and the culture of compliance in an organization faster than retaliation against good-faith whistleblowers,” Garen explains.
Garen also report second hand reports have worked well for him.
“Secondhand reports are often the most valuable because there is less emotion and bias associated. Even when the claim is not entirely validated, these reports often alert you to issues before they become more serious.”
Researcher Welch doesn’t recommend “taking decisive action” on a secondhand report.
When investigating claims, it is important to seek out witnesses and material evidence. However, a secondhand report can be the starting point for an investigation and subsequent response that could not have happened otherwise.