Why is ISO 37002 WMS essential for robustness of your whistleblowing system
The Association of Certified Fraud Examiners (ACFE)’s 2020 Report to the Nations – Global Study on Occupational Fraud and Abuse reveals that organizations lose 5% of their annual revenue because of fraud. The Whistleblowing system has proven to be the most effective tool to detect fraud. The report also reveals that organizations that do not have a hotline system suffer median losses, nearly double than those that have one.
Whistleblowing system issues
Through whistleblowing, individuals in an organization can report fraud or raise their concerns of wrongdoings so that the risk of company losses can be reduced. However, whistleblowers frequently get retaliation for the reports they make. This retaliation can take the form of ostracism, threats, dismissal, and even harassment.
Consequently, this makes them reluctant to make a report and drives them outside the company instead. This has the potential to harm the reputation of the organization. According to a book, Whistleblower: Incentives, Disincentives, and Protection, Strategies, six main issues usually arise within the whistleblowing system, some of which are the lack of support from organizational leaders, no appreciation for the whistleblowers, and the lack of efforts to promote whistleblowing policies. These things make whistleblowing less effective.
ISO 37002 Whistleblowing Management System (WMS) exists as a guideline for organizing, imposing and maintaining an effective violation reporting management system based on the principles of trust, impartiality and protection in the following four steps:
a) receiving reports of wrongdoing;
b) assessing reports of wrongdoing;
c) addressing reports of wrongdoing;
d) concluding whistleblowing cases.
Complying with ISO 37002 WMS would provide proper protection for whistleblowing systems in your organizations. With proper protection, individuals in your organizations are more likely to report wrongdoings internally as opposed to directly going outside the organization. An effective whistleblowing system will ultimately help organizations strengthen their corporate culture from within.