Make tip-offs part of the cul­ture

Finweek English Edition - - BUSINESSTRENDS CALL CENTRES - SVET­LANA DONEVA svet­lanad@fin­

AN AMOUNT OF al­most US$3 tril­lion of com­pa­nies’ rev­enue is lost world­wide each year due to fraud. A panel of ex­perts at the Fraud & Corruption Africa Sum­mit 2011 re­ported in­stances of com­pany fraud are most likely to be de­tected by tip-offs rather than other means. So tip-off hot­lines are a good idea. But like most good ideas, the ap­pli­ca­tion can of­ten go awry.

Ni­cholas John, CEO of Deloitte Tip-Offs Anony­mous, says the most com­mon mis­take com­pa­nies make when im­ple­ment­ing a fraud hot­line is they fail to iden­tify a spe­cific ob­jec­tive. “A tip-off hot­line shouldn’t be a catch-all fraud-fight­ing mech­a­nism,” says John. One of the most im­por­tant ways that a com­pany’s cul­ture can be im­proved is by en­cour­ag­ing em­ploy­ees to re­port sus­pi­cious ac­tiv­ity with­out fear of pun­ish­ment, which can only be ac­com­plished through en­sur­ing anonymity and con­fi­den­tial­ity.

The hot­line can also act as a de­ter­rent to fraud­u­lent be­hav­iour or even make up a part of the com­pany’s risk man­age­ment frame­work by im­prov­ing or­gan­i­sa­tional con­trols: man­age­ment can use tip-offs to de­ter­mine the weak­est links in the com­pany’s struc­ture. “

Com­pa­nies im­ple­ment­ing hot­lines just for the sake of im­prov­ing their rat­ings are likely to strug­gle to prop­a­gate the fraud­fight­ing cul­ture through­out the com­pany, re­sult­ing in a lack of man­age­ment sup­port and dis­trust by em­ploy­ees – known as the “big brother is watch­ing us syn­drome”.

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