Despite its tremendous potential to influence law and public policy, whistleblowing effectiveness has been less studied than whistleblower motivations and the consequences whistleblowers must often endure for speaking up.
This may come as no surprise. Of all variables associated with whistleblowing, effectiveness is the most difficult to measure.
Modern organizations, either public or private, have become increasingly more complex over the last few decades. Insiders are now considered one of the most powerful means to expose corrupt practices and make organizations accountable for harming the public interest.
The Association of Certified Fraud Examiners (ACFE) reported in 2014 that tips are consistently and by far the most common fraud detection method, with over 40 percent of all cases detected by a tip. This is more than twice the rate of any other detection method, and employees account for nearly half of all tips that led to the discovery of fraud.
ACFE data also suggests that organizations with hotlines are much more effective at detecting fraud, and that they suffer frauds that are 41 percent less costly.
Consequently, the study of whistleblowing effectiveness has the potential to greatly influence how we fight fraud and corruption worldwide.
My research project, entitled Measuring the Effectiveness of Canadian Whistleblowing Law (available on SSRN here), starts by defining a set of criteria that may be used across jurisdictions to measure whistleblowing effectiveness. It also discusses the best means for whistleblowing law to achieve effectiveness in promoting the public interest, and analyses how the law can create the right environment for reporting behavior that is against the public interest.
This project was part of my work at the International Anti-Corruption Academy (IACA) in the Master of Anti-Corruption Studies (MACS) program. It won the Best Master Thesis Award for the 2012-2014 session.
In a series of upcoming posts for the FCPA Blog, I’ll discuss some of these issues in more detail.
The research mainly builds on United States and United Kingdom experiences with respect to the development and implementation of whistleblowing legislation, and includes recommendations to address some of the shortcomings in Canadian law.
Although comprehensive quantitative research still needs to be done, the model to measure effectiveness suggested by this research project may be used across jurisdictions to develop a common platform that compares which measures appear to be more effective, and why.
In the next post, I’ll propose a model to measure whistleblowing effectiveness, which could be used to carry out comparative analysis of whistleblowing mechanisms.
Frédéric St-Martin, pictured above, advises a Canadian financial regulator on corporate governance, anti-corruption controls, investigations and the implementation of whistleblower programs. He graduated from the inaugural IACA MACS 2012-2014 program summa cum laude and received the Best Master Thesis Award in December 2014. He also holds a Master in Law from the University of Montreal, as well as a Bachelor of Common Law and Civil Law from the University of Ottawa. He can be reached by email here and through linked here.