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Bankers & Ethics
Companies that provide an assist to "whistle-blowers"
With all the attention given to ethics of elected officials during the past year, it is not unusual for business and industry to also be concerned with the subject.
Several companies now offer a service where reports of ethical abuses and white collar crimes can be made through an anonymous phone call. Employees are provided with information about an 800 number they can call from in or outside the workplace. The calls are taken by trained, usually bonded, individuals, who are available 24 hours a day, 365 days a year.
Some of these companies, such as Pinkerton, Inc. in Charlotte, NC; "The Network", out of Atlanta, GA; and others, have been dealing with financial institutions for several years. The newest one is called "EthicsLine", and is being marketed by the Association of Certified Fraud Examiners of Austin, Texas.
Ethics are briefly defined by Webster as "principles of morality." They have long been a concern to the auditor, the security officer and the directors of financial institutions, due to the nature of our business and previous bad publicity.
Many organizations have set up their own methods of policing themselves.
Some of our larger institutions have created and run their own in-house "hotline", and do so very successfully. Others may not have the inclination, the capability, or the environment to set up in-house specifically for the communication of ethical problems. Still others see the maintenance of an outside source as a better way to meet the federal sentencing guidelines, which specifically address an employee being able to report detrimental activity with no reprisal. In order to facilitate such reporting, anonymity can be virtually guaranteed by using a third party.
The "EthicsLine" material points out that "…although misconduct in the workplace continues to be a serious problem, there is still strong reluctance to blow the whistle."
Bank officers interviewed by the BANKERS' HOTLINE across the United States reveal that corporate sponsored ethics programs and communication capabilities really do make a difference-particularly where in-house procedures have been initiated and where employees are genuinely encouraged to use them. One officer told us, "It's like having a suggestion box and an auditor in every one of our offices. It keeps us informed quickly about small problems when we can easily do something about them…before they get to be major problems."
With most of the services, the day after the call is received, a full report is forwarded to the employer, who then has the option to take action as they see fit. With EthicsLine, every six months a computerized report will be generated that details the nature and type of calls, and compares them with the norms.
"An auditor or security officer looking into making an arrangement with any type of third party reporting service should give it careful consideration," according to Boris Melnikoff, Corporate Director of Security of Wachovia Corp, Atlanta, Ga. "You'd want to be as sure as you can be of the authenticity of the calls. In the case of financial institutions, there could be some pretty sensitive material being passed on. The program would require a lot of ground work and guidelines before being put into service."
Another viewpoint came from Carol Billingsley, Auditor of the Bank of Honolulu in Hawaii. "The officers of my bank," she said, "go out of their way to make themselves available to everyone, so it is not particularly necessary to go to an outside source, or even be concerned about skipping up the 'chain of command.' Our Human Resource person fields most of the comments or complaints and handles them well. We have excellent communication in-house."
Ed McDonough, Director, Security Services of Barnett Bank says they have been using the services of an independent company very successfully for over two years. Called "The Business Abuse Hotline", the brochure given to every employee cites examples of the type of calls that could be made to the 800 number. They include theft, sale of drugs, vandalism, harassment, safety hazards, and others. Ed encourages all employees to call about any unethical, illegal, or irresponsible act which could cause loss or harm to the bank, its employees or customers. "As for the types of calls," he said, "many are human relations related-which we turn over to that department for handling. But genuine business abuse calls get our immediate attention."
Editor's Note: Every financial institution should have a Code of Conduct/Code of Ethics on file, signed, by each of their employees. BANKERS' HOTLINE will shortly have a "fill in the blanks" sample Code which we will make available free to our subscribers.
Copyright © 1995 Bankers' Hotline. Originally appeared in Bankers' Hotline, Vol. 5, No. 5, 1/95
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