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ComplianceLine’s 2021 Ethics & Compliance Benchmark Report offers a glimpse into the functionality of a system under stress. Every person, organization and state was pushed to the limit during 2020; the year of murder hornets, wildfires, a global pandemic, social unrest, tumultuous politics and much more. Unlike depictions in dystopian drama, the world did not collapse from the sheer stress of adapting to a new normal.
The tenacity of the E&C community and the workforces they serve is obvious when viewing stability of benchmarking numbers from 2019 to 2020. For example, the 2019 ComplianceLine benchmark report found the average reporting rate was 4.0 reports annually per 100 employees. In 2020, this rose less than a percentage point to 4.1.
Companies that were suffering from economic changes brought on by the pandemic could have surrendered to panic and begun slashing their compliance departments, throwing culture and integrity onto a burning pyre. But we do not see that this sacrifice was made in nearly as dramatic a fashion.
Despite the tenacity of the community, this did not mean everyone prospered. Compliance departments still struggled, adapting to their work-from-home (WFH) environment and figuring out how to manage cases, conduct investigations and coordinate all of it from home.
Workforces also were forced to adapt because their compliance officers or HR representatives no longer were in the office. It should come as no surprise that in-office/in-person reporting declined from 2019’s 28% of total cases to 19% in 2020. To make up for the loss, hotline use increased by 7% and web reporting rose by 1%.
Other complications of the WFH environment can be inferred in the issue open rate, which measures days until an issue is closed from the time it is first taken. In 2019, E&C teams were closing issues at an average of 23 days and in 2020 this rose to 25 days. The rise was not dramatic, which again speaks to the tenacity of community.
One concerning piece of information to emerge was a decline in the substantiation rate of issues. In 2018, 63.22% of issues were substantiated, in 2019 it rose to 64.22%. Then 2020 saw a sharp decline to 57.15%. The significant drop of in-office/in-person reporting is thought to explain the drop in substantiation rates. In theory, a compliance officer receiving an in-person report would be able to get the most ideal information to substantiate a report. The decrease also may have been a result of the difficulty in conducting investigations from home. It will take another year to determine if the substantiation rate decrease represents a new normal or is a one-off issue for 2020.
Take a look at ComplianceLine’s 2021 Ethics & Compliance Hotline Benchmark Report for yourself to access additional details, breakdowns and more for compliance leaders to assess their programs.
