Those Who Rely on Whistleblower Hotlines are Fools

Reports about the effectiveness of harassment hotlines are leaving me cold. In a recent Letter to the Editor of the New York Times, an attorney who formerly worked with the Labor Department’s Whistleblower Advisory Committee stated that hotline reporting went up 8 percent in 2016 and the average length of resolution dropped from 46 to 42 days. While I have the deepest respect for this individual and the work he does, he’s sadly misinformed.

I have also worked with a number of organizations on ethical issues and have done a fair amount of research in the field, which have led to two books on workplace dynamics—the most recent one being From Bully to Bull’s-Eye: Move Your Organization Out of the Line of Fire. My research has shown that most employees do not trust hotlines and other mechanisms to report workplace wrongdoing. There’s a good reason for this. Take the example of Michael J. Lutz who reported an impropriety he spotted in his work as an accounting specialist at the Radian Group. The company scheduled an investigation and concluded that he was wrong and everything was proper. Frustrated, Lutz reached out to the internal compliance hotline—and one of his superiors found out and retaliated and started to force him out of the company. That’s when he contacted the Securities and Exchange Commission, which is supposed to be the whistleblower’s advocate. In spite of having solid evidence of the retaliation, nothing happened.

Ironically, one of his tasks was to make sure that internal accounting controls were in proper compliance to avoid the strict penalties that resulted from the Enron-era legislation. When he was ousted, Radian hired an outside accounting firm to prove that they were in compliance. The firm? KPMG—the Big Four accounting firm whose improprieties I recently wrote about.

Clearly, business leaders aren’t hearing what employees have to tell them on every level. In a study conducted by Mental Health America sponsored by the Faas Foundation, an astounding 69 percent of more than 17,000 people surveyed admitted to speaking poorly about their organization to others. And yet, as in the case of Bill O’Reilly, leaders continue to insist that no one had a problem because there were no complaints to the whistleblower hotline.

Boards of Directors and senior executive often tout their policies, programs and HR departments as proof that they have a value-based, inclusive, safe and fair workplace culture that includes freedom of expression. My research says otherwise. Top management still isn’t listening, making all of their mechanisms for reporting misbehavior nothing more than legal shields. Even more disturbing, my research shows they don’t want to hear what they need to hear.

Illustration credit: Dilbert by Scott Adams