By Susan M. Corcoran, Principal (914-872-6871) with Jackson Lewis P.C; Kristin L. Bauer, Principal (214-520-2400) with Jackson Lewis P.C.
At the onset of COVID-19 in 2020, the Wall Street Journal reported that over a three-month period, there was a deluge of tips, complaints, and possible referrals to the U.S. Securities and Exchange Commission (SEC). More recently, the SEC has reported record whistleblower awards. Although the extent to which remote work has contributed to these statistics can be debated, these trends and the continued popularity of remote work create an opportunity for employers to reassess internal reporting processes and their compliance culture.
Employers should have effective and accessible reporting mechanisms, including anonymous reporting, so that remote employees can report concerns of any kind.
Factors to consider include:
Adequate staffing and resources to handle complaints received in a prompt and adequate manner, including documentation of the complaint, response, and closure.
Ensuring follow-up with complaining employees to make sure reporters understand their concerns have been reviewed and addressed.
Reviewing codes of conduct to ensure consideration of the remote work environment.
Top-down messaging about important compliance values.
Reviewing business practices to evaluate compliance gaps and opportunities for misconduct created by remote and hybrid work.
Ensuring investigations can be conducted virtually as needed with appropriate privacy and confidentiality safeguards in place.
Employers should also create a culture of trust so individuals will report concerns. A low volume of internal reporting may indicate a lack of trust, while a high volume may indicate a healthier compliance culture.
Creating a culture of trust may be a particular challenge for some companies as they re-engage with workers who have been virtual for two years since the onset of the pandemic. Strategies include:
Providing more information to employees about key company events, including financial condition, to create a greater sense of security in, or awareness, of their positions. Transparency breeds trust.
Ensuring that remote employees are not feeling intimidated. Communication styles have changed. Employees may feel uncomfortable, for example, when managers hold one-sided meetings (i.e. only the employee is on camera and/or the frequency of employee/manager communications may have changed). Tweaks in management style in this “new” environment may be required to build and maintain trust.
In sum, a prudent employer keeps a pulse on the challenges of the remote work environment by reassessing the effectiveness of its reporting process and evaluating its culture. A smart employer then takes positive action.
If you would like to learn more about how to safely outsource compliance and HR functions, contact us.
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