Whistle blowing policy components can vary from company to company. There are several essential components that must be included in any whistle blowing policy to maximize the effectiveness of the policy. There are six basic components that need to be addressed: receive the complaint; acknowledge the complaint; investigate the complaint; resolve the complaint; report the resolution of the complaint; and retain necessary documentation (Thornton, 2006).
The benefit of having a whistle blowing policy is to protect against corporate fraud. The Sarbanes-Oxley Act of 2002 requires that companyâ€™s establish procedures for receipt and treatment of complaints and require an anonymous venue. According to the Association of Certified Fraud Examiners 2006 report, the most expensive forms of fraud are not detected by internal controls because perpetrators tend to work in areas not tightly controlled or are in control of the areas themselves (Thornton, 2006).
Therefore, the most effective form of fraud detection is a tip, most often coming from a whistleblower hotline. The danger of a whistle blowing policy is the backlash the blower or the company may endure. An entire organization can still be held criminally liable for employee illegal actions despite even the best efforts to prevent wrongdoing (Schwartz, 2006).
An employee may endure harassment, embarrassment, or job loss if they are found out to be the whistleblower despite the validity of the accusations. In all, whistle blowing policies are required by law and essential for deterring corporate crime. Although all six components are needed for a complete policy, the two essential elements are for success are anonymity and corporate support and resolution. Without these two major components, whistle blowing policies are simply policies and not crime deterrents.