There is a tendency in organizations to dismiss secondhand whistleblower reports as little more than hearsay. However, experts say secondary whistleblower reports can actually be extremely valuable for uncovering information about fraud and other internal wrongdoing.
One recent study by CFO.com analyzed more than two million whistleblower reports from more than 1,000 public companies in the United States, discovering secondhand whistleblower reports were actually 50 percent more likely to ultimately be substantiated. This means these reports tend to be more credible than firsthand reports, a finding that may contradict what many might expect.
The researchers talked to chief compliance officers about their findings, and they offered two primary reasons why secondhand reports tend to have added credibility.
One reason is that many would-be firsthand reporters never come forward with their information because they fear retaliation for making those reports. Secondhand reporters don’t need to worry about this as much, because they are not going to be as personally involved as someone with firsthand knowledge of the situation. In other words, because they have less to lose, they’re more comfortable coming forward.
Another reason secondhand reports tend to have greater value is that firsthand reports can often be personally motivated, and thus more frivolous. Secondhand reporters are usually people who will come forward after having personally vetted the situation, so they’re only going to actually come forward and say something if they’re certain about their claims.
It is important for companies to encourage whistleblowers (firsthand and secondhand) to come forward with their information and to offer clear processes for them to do so. For more information about the steps a whistleblower can take when he or she discovers internal wrongdoing, contact an experienced whistleblower attorney at Kardell Law Group.