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Strategic Management ×
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Three level review to evaluate the effectiveness of a hotline program.

Compliance officers need to determine how to evaluate the effectiveness of their hotline program.  A checklist approach is only a process review of outputs, but it does not provide evidence of program effectiveness in terms of outcome.  Hotline effectiveness evaluations should involve a three-level review.  The first level can be a process checklist review of the hotline design, structure and outputs, but that alone has very limited value in terms of knowing how well the hotline is operating and whether it is effective in meeting its objectives.  The second review level addresses what has been done in connection with this process, followed in the third level by a determination of how well these elements and actions have contributed to having an effective compliance program. The real challenge is knowing how to conduct all these tasks.  The following provides insights into Strategic Management consultants’ evaluation of hotline effectiveness:

Level 1. Review of: (a) design and structure of how the hotline functions; (b) whether it operates 24/7 with both live operators and web-based reporting; (c) poster locations that explain how to contact the hotline; (d) call report volume; (e) whether all calls are logged with time of receipt, nature of call, and to whom it was sent; (f) types of information received; (g) what reports regarding the hotline were made to the executive leadership and the board; and (h) file security and access controls that are limited to authorized persons; etc.

Level 2. Review of: (a) the adequacy of the information provided in the Code of Conduct and policies related to reporting through the hotline; (b) what supporting policies exist related to reporting through the hotline (Anonymity, Confidentiality, Non-Retaliation, Investigations, etc.) and whether they are being followed; (c) quality of compliance training on how to report problems without fear of retaliation; (d) how well the anonymity and/or confidentiality of callers is protected; (e) methods by which employees are being reminded that the hotline is available for them; (f) how executive leadership and the board have shown support for the hotline; (g) whether call reports are sufficiently detailed so as to permit appropriate follow-up; (h) adequacy of training of those investigating and resolving hotline issues; (i) whether there is controlled access to hotline records and documentation of those who accessed files; and (j) whether call reports are being diligently followed up to resolve issues and problems, etc.

Level 3.  Review of evidence of: (a) how well employees understand how to report through the hotline; (b) employee attitudes and confidence in reporting problems to the hotline; (c) how the information received through the hotline was collected, analyzed, investigated, and logged/tracked through resolution; (d) how well the issues raised in hotline reports are being resolved; and (e) what resulted from the information received through the hotline, etc.

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For more information on this topic see www.complianceresource.com and www.compliance.com.

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