Strong internal programs can reduce the number of whistleblowers
I've suggested before that this is a Golden Age of whistleblowing, for better or worse.
Employees, who have no doubt heard about the multi-million dollar paydays that some whistleblowers have received, are tempted like never before. At the same time, there are plenty of loyal employees out there that certainly do not want to tap their company for a huge pay off. They would rather the company correct any perceived wrongs with a minimum of angst and retribution.
This means that companies have every reason to offer a robust hotline program, which most employees take advantage of before they seek out formal government whistleblower programs. Companies might find that they can reduce the number of whistleblowers seeking huge payout by running solid internal reporting programs.
Thomson Reuters Accelus quotes the views of one expert, who says that, "Companies should not fear that potential SEC whistleblower rewards will cause a flood of people to report concerns straight to the SEC, because the possibility of getting a monetary award is the least likely motive for reporting suspected misconduct. A survey conducted after Dodd-Frank went into effect showed that almost all respondents reported internally first before considering reporting outside the entity."
The article also noted that, "Companies should do more to encourage internal reporting, and should be sure they do not discourage it, because the more an employee tries to report internally and is rebuffed or ignored, the more likely the employee will be to perceive retaliation. And the feeling of facing retaliation for doing what they think is right drives more employees to the SEC than does a possible cash reward."
- here's the article