Hotlines were introduced in United States federal whistleblowing legislation a long time ago. The idea was to make it safe and easy to report violations of health and safety legislation. The phenomenon of “whistleblowing” is embedded in American society. It is seen as an extension of the right to freedom of expression, a right protected in the First Amendment to the United States Constitution. The False Claims Act was drawn up back in 1863, and allows citizens to sue companies that improperly disadvantage the government in the name of the state. Since then, an impressive whistleblower infrastructure has developed in the States, including a whole range of state and federal laws protecting whistleblowers. In 2002, Sarbanes Oxley (SOX) legislation extended whistleblower protection further; SOX requires that employees must be able to anonymously report suspected abuses. SOX also stated that internal whistleblowing was a suitable method. Companies listed on the New York Stock Exchange are obliged to comply with these conditions. European companies not listed on the New York Stock Exchange are considering an internal whistleblowing hotline either in response to other legal requirements (such as corporate governance codes) or private initiatives. Above all, companies increasingly see whistleblowing hotlines appearing at other companies, and are adopting this practice as part of their integrity policy.
A good internal reporting procedure, including a reporting system (possibly anonymous), is increasingly seen as an essential component of a comprehensive integrity policy. International organisations (Transparency International, ICC) have declared a whistleblowing hotline as best practice, and the Big Four accounting firms are also promoting the use of whistleblowing hotlines. In our practice, we’ve seen the demand for an internal whistleblowing hotline growing, and noticed that an increasingly professional approach is being taken in the implementation and management of the tool at the same time.