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The importance of internal reporting systems

The importance of internal reporting systems.

Fraud and misconduct should never go unnoticed within a company, but how are potential wrongdoings discovered? The importance of having internal reporting systems in place is evident in every organisation, regardless of size. In general, organisations that have implemented an anonymous whistleblower function experience smaller financial losses than those that have not. 

There are different ways to discover misconduct 

According to the global study “Report To The Nations, 2020” from ACFE (Association of Certified Fraud Examiners), tips from employees are extremely valuable in combating wrongdoing. A whopping 43% of all misconducts were discovered thanks to a tip. 

The report also shows that the number of tips will increase with the implementation of internal reporting systems. Whistleblowing services allow whistleblowers to remain anonymous throughout the process. Individuals are therefore more likely to feel comfortable sounding the alarm about unethical activities in the workplace. This could potentially save the company a fortune. With better internal controls, we can also reduce the risk of reputational damage to the organisation. 

Internal reporting systems equals more satisfied employees 

According to a study by PayScale, employees who feel trusted by management are generally happier and more satisfied with their workplace. By implementing a whistleblower service, the organisation acknowledges that the voice of each individual employee is important and can make a significant difference. This creates a snowball effect where employees feel more responsible and, together as a company, strive to become the best in the market. 

Read more: How to encourage employees to report misconduct 

Do you recognize the importance of internal reporting systems? Are you ready to discuss whistleblowing systems for your company or organisation? Whistlelink offers an all-in-one whistleblower solution with anonymous reporting channels and your own website for your whistleblower function. Contact us for a free trial! You can also read more about the EU Whistleblowing Directive here and at EUR-Lex.

Read more: Implementing a whistleblower system: Our 6 best tips

If you have any thoughts about this article or would like to know more about Whistlelink, we’d love to hear from you.

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