NAVEX Report Reveals Surge in Whistleblowing, Highlights Disparities Between Third-Party and Employee Reports

A recent report published by NAVEX shed light on whistleblowing and hotline trends in 2023, showcasing a record-high volume of reports and significant differences between those filed by third parties and employees. Analyzing data from 1.86 million global reports across thousands of organizations employing approximately 57 million individuals, NAVEX, a leading integrated risk and compliance management software vendor, uncovered key insights.

For the first time, NAVEX examined whether reports were submitted by third parties or employees. The findings revealed that third parties contributed a significantly higher median share of reports related to business integrity matters compared to employees, accounting for 50 percent versus 17 percent, respectively. Business integrity issues encompassed conflicts of interest, vendor problems, fraud, global trade, and human rights concerns. Additionally, third-party reporters were twice as likely to submit reports concerning accounting, auditing, and financial reporting, constituting 10 percent versus 4.5 percent filed by employees.

Carrie Penman, NAVEX's chief risk and compliance officer, explained the disparity, stating, "Primarily, I think it reflects the types of issues that third parties are more likely to witness or be involved in." She emphasized the unique vantage point third parties hold within the supply chain, enabling them to detect discrepancies ranging from vendor and payment issues to broader concerns regarding product quality, safety, and ethical considerations.

The report also revealed that organizations received a median of 1.57 reports per 100 employees through their internal reporting systems, surpassing the previous record set in 2022. Moreover, the overall median share of substantiated or founded reports reached an 11-year high at 45 percent in 2023.

Regarding accounting-related whistleblower reporting, the report highlighted emerging trends. Accounting-related reports exhibited lower anonymity rates, longer investigation and closure times, and higher substantiation rates compared to other types of reports. Notably, these reports were twice as likely to be filed by third parties than by employees, constituting a median of 4.3 percent of all submissions.

Furthermore, the report detailed the distribution of reports by category, with workplace behaviors and human resources-related matters comprising the highest percentage. Discrimination, harassment, and retaliation were among the notable categories reported by employees and third parties alike.

NAVEX underscored the significance of these findings, emphasizing the value of robust internal reporting programs in providing real-time intelligence to inform business decision-making. The report's comprehensive analysis offers valuable insights into the evolving landscape of whistleblowing and highlights the importance of fostering a culture of transparency and accountability within organizations.

By fLEXI tEAM