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Whistleblowing as a signal: changing the way you think about your compliance hotline

Companies that have whistleblower or compliance hotlines need to think of their systems differently. At Speeki, we also like to look at things a little differently. Part of this involves looking at things through an ESG lens.

While the definition of ESG is ever-changing, it includes three broad categories: environmental risks, social risks and governance risks. These three categories consist of many smaller areas.

The Speeki ESG Risk Model outlines what we consider these smaller risk areas to be:

Graph showing the 19 risk areas divided into Environmental, Social and Governance, according to the Speeki model

Most of the complaints or reports made through a whistleblower system can somehow relate back to one of these risk areas.

Why link reports to risk areas?

Most companies link received reports to categories. These categories could be related to the type of risk (like the above), based on the location of the report, or perhaps linked to the internal group that is going to investigate it. Categorising the issue is helpful for keeping track of an issue and being able to glean information from it.

Most companies also use these categories when reporting on received issues for management or the audit committee, showing graphs that break down the reports received per region or per risk area. This gives an indication of where certain issues are coming from and the sorts of issues that are coming through the system. This information is sometimes used by compliance or investigation teams as a loose indicator that a trend might be emerging.

Speeki looks at these trends or indicators as ‘signals’, and encourages companies to supercharge their review of these signals and really use that data to analyse the health and development of their risk areas. This can form part of a company’s own ESG framework.

A signal is a piece of information that conveys some form of information. A report made through Speeki Messaging (what we call our compliance or ESG ‘whistleblower’ system) is more than just a report about an event; it is a signal that, when combined with other signals, might identify a trend, a leading indicator or perhaps a drift of a particular issue away from its norm. It is this element that Speeki believes is significantly underserved in most compliance and ESG programmes. While it looks good on a dashboard to categorise a report to a risk area, it is more valuable if considered with other signals to try and draw a trend or an indicator of something much bigger.

Our five best practices for using your reporting system as a signal
1. Categorise

It is essential to categorise the reports into one of the risk areas that you have across your framework. The Speeki ESG Risk Model provides a set of 19 key areas that reports can be categorised to. This classification will link matters across multiple signals and allow you to view a more holistic model.

2. Be consistent

If you are going to categorise reports, then it is very important to use the same categorisation model across the company and ensure that all your tags are consistent. Without this, it will be very challenging to bring information together and link signals in a meaningful way. That is why we adopted the Speeki ESG Risk Model – it was our ‘stake in the ground’ as to what ESG means and how it can work for us.

3. Link other signals

Once you have a common framework for mapping information, it is important to start expanding the amount of information. The Speeki Platform looks at multiple signals: one is the reporting system, but others might be conversations, declarations, disclosures, programme reviews, gap analyses, investigation reports, exit interviews and surveys. All of these signals, and a host of others, can be used together to draw inferences, trends and drifts from the identified ‘base’ position.

4. Think beyond the investigation

When an issue is reported, there is often a flurry of activity to investigate and get to the bottom of the accusation or report. This is totally expected and should be a major focus. However, as you are working through the specific issues raised by the report, it is essential that you also firmly focus on building up other signals that can be used in a broader assessment of the root cause of the issue and how it relates to your risk programme. It is not always possible to immediately establish a root cause of a particular issue, but you can use the data from other signals and adjacent risk areas to conduct a root-cause assessment. It is that additional data that allows you to start to see trends and ultimately make an informed decision on not only the root cause, but also the best course of action to stop the matter from happening again.

5. Use expertise and technology to identify and predict future issues

It would be great if a piece of technology like the Speeki Platform could just absorb all the data from the signals and miraculously and accurately predict the next issue. That is certainly the direction that Speeki is heading in, but it is unreasonable to assume that something like that will be fully operational within the next few years at least. The inability to have a perfect prediction model is more an issue with the amount of data needed to predict issues accurately than a technology issue (most of the technology is already around to do that prediction). In the meantime, it comes down to getting the data right through having lots of signals activated across multiple risk areas and having that data accurately categorised according to your risk model (in our case the Speeki ESG Risk Model). Once you have the signals producing information, you can start to fill the time gap with human experience, leveraging the knowledge and skills of experts in risk and ESG to look at the data and start to draw conclusions.

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Your whistleblower or compliance hotline is more than just a mechanism for someone to make a complaint or a report; it is a look into the ever-changing health of your company.

The ability to collect data through signals across key risk areas is key for predicting and managing ESG risks across your entire company.

Drawing on the Speeki Platform to build strong ESG practices can transform a whistleblower report on a discrete issue into a signal that points towards a trend of increased risk, allowing you to predict and manage these risks for the benefit of your company and its stakeholders.

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