Whistleblower Channel: Do You Understand Its
Characteristics and Advantages?

Whistleblower Channel: Do You Understand Its Characteristics and Advantages?

Fraud is one of the major issues with a significant impact on society, especially in Latin America. In private sector organizations, fraud directly affects profitability, leading to losses of up to 5% of total revenues. In the public sector, it significantly deteriorates services to citizens.

There are several methods to mitigate fraud, and one of the most effective ones is a whistleblower channel.

A whistleblower channel is a tool that allows employees, suppliers, and customers to report irregularities, suspicious conduct, or labor abuses within an organization. It should be readily available and easily accessible to both internal and external stakeholders since reports can come from disgruntled suppliers or customers who have encountered irregular situations related to the organization.

Implementing a whistleblower channel not only warns about potential irregularities or abuses but also has a medium to long-term dissuasive effect, preventing people from engaging in acts of corruption or harassment, among others. This happens because potential wrongdoers, upon realizing that there is a real possibility of their misconduct being detected, are discouraged from committing or avoiding such actions. This effect can be enhanced if the whistleblower channel is based on digital media, as it essentially turns the mobile devices of the organization's members into potential anti-fraud security cameras.

It is worth noting that, according to the report by the Association of Certified Fraud Examiners (ACFE), between 43% and 58% of frauds are detected through whistleblower channels, making them the primary means of fraud detection in an organization. The variation in this percentage depends on the level of training and awareness-raising conducted within the organization regarding what is right or wrong according to the code of ethics and corporate values.

What Is a Digital Ethical line?

A digital ethics hotline is a whistleblower channel operated through technology. The whistleblower submits their report via a whistleblowing website or app, which is automatically redirected to the designated investigator responsible for handling it. Importantly, the investigator can be either an internal or external entity of the organization. The investigator reviews the report through a dashboard with multiple functions that enhance their investigation. One significant advantage is that there will always be direct communication between the whistleblower (ensuring their anonymity) and the investigator.

At SHOGUN Ethical Line, we transform the reporting process to make it less complex and tedious, offering a secure, digital, and user-friendly experience for whistleblowers. By ensuring agile reporting processes in your organization, you create a culture of ethical behavior and transparency, resulting in increased loyalty among your employees.

Author: André Barrantes
CEO and founder of SHOGUN Monitor. He is an expert in digital training development and specialized technology in Operational Fraud Prevention and corruption, with clients in over 20 countries in America and Europe.