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Since enactment of Dodd-Frank whistleblower provisions, companies have increased communication about internal reporting mechanisms, training of managers, but changes aren’t as great as you might expect

Predictions that the whistleblower provisions contained in the Dodd-Frank Act would undermine existing compliance programs, appear to have gone unrealized according to a survey conducted by the Society of Corporate Compliance and Ethics (SCCE) and its affiliated Health Care Compliance Association (HCCA). The survey, conducted during July and August, was fielded among compliance and ethics professionals to determine the impact Dodd-Frank has had on compliance and ethics programs. This study reveals that the Act has led companies to increase employee communications on what to do when encountering wrong doing, and to greater training of managers about how to handle reported wrong doing.

“The survey results will likely strike some as surprising. In terms of the Dodd-Frank whistleblower provisions, it does not appear that it is causing wholesale changes to compliance programs. In fact, there may be some positive benefits from the Act. Making employees more aware of internal mechanisms for reporting wrongdoing could head off a lot of problems,” said Roy Snell, Chief Executive Officer, SCCE and HCCA.

According to the survey, only 6 percent of survey respondents reported that Dodd-Frank has led to a “great deal” of change to their compliance program. And of publicly traded companies –those facing the greatest risk from Dodd-Frank –only 8 percent reported that their compliance program had changed “a great deal” as a result of the Act, while a greater number –46 percent –report no change in their compliance program.

The ubiquity of company anonymous help lines is one possible explanation for the reported lack of change. Overall 90 percent of respondents reported having help lines in place and 99 percent of respondents from publicly-traded companies report having help lines in place.

Changes that were reported due to Dodd-Frank include the following:

  • Increased communication to employees for reporting wrongdoing (75 percent);
  • Increased communications to managers about how to handle employee allegations of wrongdoing (46 percent); and
  • Changed anti-retaliation policies (13 percent).

When looking to future changes, 74 percent of survey respondents (and 83 percent of respondents from publicly-traded companies) expect employee communication to increase. In addition, overall 66 percent of respondents (74 percent of respondents from publicly traded companies) reported an expected increase in manager communication about handling allegations of wrongdoing.

“It’s also good to see increased training of managers in properly responding to allegations of wrongdoing. This training and communication will likely lead to quicker and better resolutions of allegations. Moreover, it will demonstrate to the workforce that companies are committed to integrity and genuinely expect people to work in a compliant, ethical manner,” added Snell.

Source: Society of Corporate Compliance and Ethics (www.corporatecompliance.org) and the Health Care Compliance Association (www.hcaa-info.org).