What is it about?
The EU Whistleblower Directive lets companies choose how to run their internal reporting systems, such as using anonymous hotlines inside or outside the company. But it’s not clear how the type of hotline affects employees’ willingness to report serious problems—especially when the company benefits from the wrongdoing. We ran an online experiment to test two factors: a) Who runs the hotline (inside the company or by an outside provider). b) How much the company depends on the wrongdoing (high vs. low impact on financial results). We found that people were more willing to report when the wrongdoing was described as highly important to the company’s finances. We saw only weak evidence that the type of hotline changed this effect. However, extra analyses showed that external hotlines made people feel safer and more anonymous when reporting serious financial fraud. Overall, our results show that the financial importance of the wrongdoing strongly shapes reporting intentions. To encourage reports of smaller issues, organizations could offer multiple reporting channels, lower the threshold for reporting, and strengthen their ethical culture through both formal policies and informal support.
Featured Image
Photo by Iqro Rinaldi on Unsplash
Why is it important?
Protecting the public and investors: Whistleblowing often stops fraud and prevents harm. Knowing what encourages or discourages reporting helps companies, regulators, and policymakers design systems that catch problems early. Practical guidance for organizations: Your findings show that when wrongdoing has big financial stakes, employees feel a stronger duty to report—but smaller issues may go unreported unless companies provide multiple, trusted reporting options and a supportive culture. That’s actionable advice for compliance teams. Evidence for better policy: The EU Whistleblower Directive allows flexibility in how reporting lines are set up. Your study provides data to help regulators and companies decide whether internal vs. external hotlines better protect whistleblowers and foster transparency.
Perspectives
From my perspective, this article offers valuable insights into the complex dynamics of whistleblowing within organizations. I found it particularly striking that whistleblowers are more likely to report wrongdoing when the consequences for the organization are highly material and the organization depends on that wrongdoing. This challenges the idea that organizational self-interest always suppresses reporting and highlights how perceptions of impact strongly shape ethical decision-making.
Martin Altenburger
Webster Vienna Private University
Read the Original
This page is a summary of: The Effects of Organizational Dependence and Hotline Administration on Whistleblowing Accounting Fraud, Business Ethics the Environment & Responsibility, September 2025, Wiley,
DOI: 10.1111/beer.70030.
You can read the full text:
Contributors
The following have contributed to this page
