MANAGING OUTSOURCED REPORTING SERVICES EFFECTIVELY

would “expose his dishonest management”! If the anecdote doesn’t indicate a cancer
that exists in many organisations it may be quite funny. The introduction of a reporting
service is clearly a risk in entities where management is behaving inappropriately!
10
o Another concern which is often raised by prospective subscribers is the question of
malicious and “bad faith” disclosures. This could well prove to be a significant problem
if not managed properly. The golden rule is that no one should be confronted until an
initial investigation has confirmed that a disclosure has substance. I recall a case where
a CEO was so incensed when he received a report concerning one of the women in the
accounts department that he ran down the passage to her office and tried to strangle
her! This could have been avoided had the report been sent to a senior person such as
the security risk manager of the internal audit manager who could have dispassionately
undertaken an initial investigation and only subsequently brief the CEO.
o Another prospective subscriber (a large retailer) commented that he didn’t like the idea
of introducing a reporting service as it would indicate to his staff members that
management didn’t trust them. When I asked him how a reporting service differed from
the undercover agents, covert CCTV cameras and ghost shoppers that I knew he used,
he was at a loss for words! This attitude is actually quite common. “We’re an honest
bunch” lamented one CEO but he was unable to explain the fact that his organisation
was losing millions of Rand through theft and fraud every year.
o Finally, there is a real risk that the credibility of the directors and senior management
could be seriously dented if a reporting service, once introduced, is not fully embraced.
What this means is that employees soon become cynical when they constantly make
disclosures but see no action being taken by management. Sadly this is a common
phenomenon!
AN INTERNAL OR AN OUTSOURCED SERVICE?
I am perhaps, and may be forgiven for, not being entirely objective in this respect. It is a
widely held view that independence is a cornerstone of any effective reporting service and
this was even highlighted many years ago in the report of the Presidential Commission in
the USA subsequent to the Challenger disaster.
Notwithstanding all the evidence that exists to support an independently managed ORS
there are still a number of major organisations that insist on an in-house service. Many
insist that they don’t want any external party to have knowledge of their internal secrets!
This argument sadly doesn’t inspire any confidence in me as, whether intentional or not, it
creates the perception that the entity may not really be committed to transparency,
integrity and openness. It casts a shadow and begs the question as to what the entity may
wish to hide.
Version 2015-01 © BE HEARD 2015