RIMS Poll: Firms Ignore Whistleblower Need
NU Online News Service, April 9, 1:13 p.m. EDT?A survey of risk managers has found that about a third of the companies they work for have no whistleblower program in place to report corporate misdeeds.
The quickie poll, released today by Allianz Global Risks, also found that risk managers have a divided opinion as to whether new federal legislation will stem the mounting tide of corporate accounting scandals.
Allianz said only 39 percent of 115 survey respondents at the annual Risk and Insurance Management Society Inc. conference in Chicago this week, said they believe the 2002 Public Company Accounting and Investor Protection (Sarbanes Oxley) Act will significantly reduce corporate malfeasance.
The poll represents the opinion of nearly three percent of the 4,000 on hand for the conference. Allianz did not say what the confidence or accuracy rate was for the research.
Another 33 percent of the risk managers polled said they don't think Sarbanes Oxley will rein in malfeasance and 28 percent don't know if the legislation will be effective
"We don't think legislation is a substitute for good risk management programs. We are looking at a company's overall corporate governance program, and more importantly, that it is ingrained in daily corporate behavior," said Brian Gauen, vice-president of underwriting for directors' and officers' liability insurance for Allianz Insurance Company, the Burbank, Calif.-based U.S. unit of Allianz Global Risks in Munich.
"Corporate governance practices have a direct impact on the availability and pricing of directors and officers insurance," Mr. Gauen added.
The survey, Allianz said, also noted other differences among risk managers related to corporate governance programs. Nearly one in three (27 percent) of survey respondents said their companies do not have a formal whistle-blower process. An additional three percent don't know if their companies have such a procedure.
Jack Hampton, executive director of RIMS, said the poll findings show "the size of the task facing risk managers, who coordinate activities to identify and mitigate an organization's exposure, when they don't even have a formal process for whistle-blowing."
Mr. Gauen said remarked, "Given that whistle-blowers proved instrumental in uncovering fraud in recent high-profile cases, and that such a policy is one of the easiest elements of a corporate governance program to put in place, it's surprising more companies haven't done so.
"It raises questions about whether companies have tackled tougher challenges that would focus on prevention rather than uncovering wrongdoing after the fact."
Allianz said the 115 survey respondents consisted of risk managers from a broad cross-section of industries, with 87 percent from North America, and 65 percent working at companies with more than $500 million in annual revenues.
Allianz Global Risks said it provides coverage for the majority of Fortune 500 companies.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.