TheCorporateCounsel.net

NAVEX recently announced the release of its 2024 Whistleblowing & Incident Management Benchmark Report. In 2023, internal reporting programs were used at record levels, and the substantiation rate (rate of reports found to be true) was at an all-time high at 45%. Those combined statistics gave me pause — but NAVEX says this is good news. “For those with trusted and effective internal reporting programs, this added up to greater visibility into the trends of risk, ethics and culture playing out in their organizations’ operations – real-time intelligence to inform business decision-making.” They also noted that more companies are taking action.

Highlighting the seriousness with which organizations are taking reports received, more substantiated reports (18%) resulted in separation from employment in 2023, up significantly from 14% in 2022 and 12% in 2021. The share of reports resulting in no action – effectively the opposite end of the outcome spectrum – fell from 17% in 2022 to 14% in 2023.

NAVEX reported information for employees versus third parties for the first time, and the results of this analysis may surprise you.

Third parties as a group delivered a far greater median share of reports related to Business Integrity matters than employees in 2023 (50% versus 17%). Encompassing topics like conflicts of interest, vendor issues, fraud, global trade and human rights, this category of issues can manifest in various elements of a supply chain.

Third-party reporters also showed twice the median share of Accounting, Auditing & Financial Reporting reports as employees in 2023 (10% versus 4.5%).

If you’re looking to assess your own reporting program, NAVEX notes that a “diverse array of topics, inquiries, and allegations in internal reporting” usually indicates that a company’s program is robust and “even minor efforts to promote internal reporting significantly improve the mix of report types received.”

– Meredith Ervine