Anonymous
Reporting Programs
and Employee Hotlines
MySafeWorkplace.com
5995 Greenwood Plaza Boulevard, Suite 110
Greenwood Village, Colorado
800.650.7005
Your Presenter
Mr. Steve Foster is the President of
Business Controls, Inc. Mr. Foster’s 25
years of unique and diversified executive
and operational leadership experience
combines enterprise Governance, Risk and
Compliance expertise. He has expert
knowledge regarding the convergence of
security and technology, as well as top level
consulting and training in EEO/Internal
Controls matters. Mr. Foster’s expertise is
rooted in developing integrated SaaS
technology solutions in the Governance,
Risk and Compliance space. Mr. Foster
frequently lectures across the country on
the topics related to risk management,
ethics and corporate compliance,
conducting ethical workplace investigations,
fraud, workplace violence, and the
convergence of technology and security.
Mr. Foster is board certified in Security
Management (CPP designation) and in
Case Management for Internal
Investigations (PCI designation) by ASIS
International and is National Chair of the
ASIS Business Practices Council and he is
an ASIS National CPP Review Course
Instructor.
Quick Quiz
 Fraud is most often revealed by?
1. A tipster
2. Chance
3. An audit
Quick Quiz
 Most tipsters request anonymity?
True
False
Quick Quiz
 Monetary incentives increase the
volume and quality of tips ?
True
False
“I am incredibly nervous we
will implode in a wave of
accounting scandals, and our
[successes are] nothing more
than an accounting hoax.”
“I am incredibly nervous we
will implode in a wave of
accounting scandals, and our
[successes are] nothing more
than an accounting hoax.”
—Sherron Watkins
Former Enron, VP Corporate Development
and Whistleblower
“The company is probably in the strongest and
best shape that it has ever been in…There
are no accounting issues, no trading issues,
no reserve issues, no previously unknown
problem or issues.”
—Kenneth Lay, Enron CEO
statement to Wall Street
Objectives
Examine the need, benefit and
value of anonymous incident
reporting systems
Discuss the key elements of an
effective AIRS
Learn how AIRS can improve
workplace safety and productivity
Questions and answers
Trends
More sophisticated crimes and
offenders
More victims of chance than
victims of choice
Greater use of technology
Larger losses
More litigation
Organizational Profile
Has no^crime prevention or
detection strategy
Ineffective or inadequate policies
Focuses on problems, rarely
solves underlying issues
Has communication problems
across all levels
Modern AIRS
Permits users to anonymously and
safely report illegal, unethical and
improper workplace behavior
24/7 toll-free telephone and Internet
access
Multi-lingual capability
Automated report distribution and alerts
Case management capable with
customized, detailed reporting
Key Benefits
Dramatically reduce losses from theft,
fraud and employee dishonesty
Effective barrier against workplace
substance abuse
Mitigates liability
Federally mandated for publicly
traded companies
Demonstrates to employees and
shareholders the organization cares!
Common Myths
False reports are common and create
liability
Employees are distrustful and won’t
make reports
Out-sourcing is expensive and
unnecessary, “besides, our open-door
policy does the same thing.”
All anonymous incident reporting
systems are alike
“I wish we would get caught.
We’re such a crooked
company.”
—Sherron Watkins
“I had every reason to think that the underlying
businesses, the fundamentals of the
underlying businesses, were strong.”
—Kenneth Lay
Enron Facts
5000 jobs eliminated
Stock went from $90 to Zero
$61 B shareholder value lost
$83 K lost per employee
Arthur Andersen, LLP collapsed
7th largest bankruptcy in U.S.
history
Enron Facts
Vinson Elkins billed Enron $27
million for its investigation of the
Watkins allegations
Time Persons of
the Year 2002
Sherron Watkins
Colleen Rowley
Cynthia Cooper
Enron Facts
Anderson billed $52 million for
audit and accounting services
the year prior
Sarbanes-Oxley
Applies to public companies only
Independent board and audit
committee
Assessment and disclosure
Disclosure of “material correcting
adjustments”
CEO and CFO certification
Section 301(4)
a) receipt, retention and treatment
of complaints…regarding
accounting, internal controls, or
auditing matters; and
b) confidential, anonymous
submission by employees…of
concerns regarding questionable
accounting or auditing matters.”
Consider
“Whistleblower” protection
implications
Confidentiality and discovery
issues
Contract and insurance coverage
Vendor’s skill and experience
Vendor’s promises and claims
Testing
Internal v. External
Internal Solution
Relatively easy to launch
Initial small investment
Rarely trusted
Very difficult to properly administrate
Significant legal exposures
Security, scalability, and
sustainability issues
Internal v. External
External Anonymous Incident
Reporting System (AIRS)
Very easy to launch, maintain, and
secure
Small investment
Highly trusted
Very easy to administrate
Significant legal protections
SaaS Model
24/7 Call center
Trained, multi-lingual call-takers
Internet interface
Flexible report dissemination and
retention system
Easy roll-out
Simple user interface
Consulting and support
Warning Signs
Low call volume
Missing or incomplete reports
Delays in receiving reports
All reports are anonymous
Allegations seem to all point to
one group or area
Litigation Avoidance
Follow policy
Retain all reports and document
findings and determinations
Treat all people with respect and
dignity
Protect confidentiality
Comply with the law
“We lost value in several equity
investments in 2000, $500
million of lost value.”
—Sharon Watkins
“The collapse of Enron and the subsequent
collapse of Arthur Andersen were
tremendous tragedies. But as I stated at the
time of my indictment on July 8, 2004,
failure does not equate to a crime.”
—Kenneth Lay
Questions?