Ep. 94: Neta Meidav - Internal Ethical Reporting

Contact Neta Meidav:
https://www.linkedin.com/in/netameidav/


Vault: https://vaultplatform.com/


FULL EPISODE TRANSCRIPTAdam: (00:05)
 Welcome back for episode 94 of Count Me In, IMA's podcast
about all things affecting the accounting and finance world. I'm
your host, Adam Larson, and today I'll be bringing you right up
to a conversation between my cohost Mitch Roshong and Neta
Meidav. Neta is the Co-founder and CEO of Vault, a reporting
platform designed to resolve workplace misconduct incidents. In
this episode, she discusses the pitfalls with traditional
internal reporting or whistleblower policies within
organizations, and how technology such as her platform can
enhance internal, ethical reporting moving forward. So without
further ado, let's hear their conversation now.

Mitch: (00:45)
So we're here today to talk about alternative and innovative
solutions to traditional whistleblower policies within
organizations. I'd first like to set the stage for our listeners
and kind of explain the why for our conversation. So can you
share some examples of activities that would require employees to
act as whistleblowers?

Neta: (01:04)
Sure, of course. I'm happy to do so. Maybe first it would be
helpful to distinguish for the purpose of this conversation,
between whistle-blowing and internal, reporting. I think it's
important to explain that, the way we see it, whistleblowing is
the act of reporting misconduct or ethical breaches externally.
For example, to an enforcement agency of sorts like the SEC,
whilst, internal reporting is really what, we want to be talking
about today and the process which we want to fix and optimize,
for, for everyone's benefit. So when we talk about kind of
activities that would require employees to act as whistleblowers,
I think that the past year showed how that category for internal
reporting has it has expanded. So, we of course consider the
traditional corporate and financial fraud and corruption issues
that require people to, come forward and report, and only today,
I, woke up to, the interesting article on the Wall Street Journal
about, Volkswagen, which I'll, I'll come back to, later on in
this conversation, because I think it's, it's crucial, but the
things that happen in every organization, that require, to kind
of surface up concerns and, and make management aware.

Mitch: (02:43)
So then in response to these activities and the various things
that go on within an organization, what are some of the
traditional solutions or policies that companies have in place,
whether it is the internal or the external, like you mentioned,
and what are some of those normal outcomes in your opinion?

Neta: (02:59)
Sure. So I think, you know, I think company’s are largely trying
to do the right thing by saying, come forward to us internally.
Speak to your manager speak to someone in the organization, speak
to our compliance office, but if you cannot, here's a hotline for
you, right. And that's the, the traditional mechanism that we've
seen for decades that was, you know, became specifically popular,
due to, the Sarbanes Oxley Act and the requirements on, on a
third party operated whistleblowing platform that was put in
place back in 2002. The issue with such legacy solution such as,
third party hotlines is that number one, they don't really do
much to build trust, right? They're not helping with building the
internal trust that we need to see today, in every modern
organization, because essentially what they're saying is if
there's an issue, well, call this call center and report a
problem, and the company will communicate with this call center
and pick it up. But here's an intermediary for you and this is
how you need to come forward because the act of reporting is just
so scary and difficult, and so here's, here's a route for you.
The second thing is if you look at the data and the statistics,
they actually tell you that hotlines are in many cases, not only
are there not the solution, but I would say that they're part of
the problem, because if you look at, the global business ethics
survey that was published this year, it talks about, the fact
that only 6% of all cases that are reported internally in
corporate America are reported to the hotline. In other cases,
you find, so one of the biggest providers of hotlines in the
world, I was talking about 11% of reporting happens to its
platform. So that's a very low number, and that comes to show
that people essentially do not really trust that option, and do
not find it as a, as an optimal solution for when they are
experiencing something that is in fact very difficult, to come
forward and speak up about. And I think that is perhaps one of
the reasons that we're seeing, the Department of Justice just
published its guidelines a few months ago, to measure the
effectiveness of your ethics and compliance program, and, now
it's time to do so because humanity has moved on and so did
technology, and there are other ways to create today. And there
are other ways to ensure that people feel like they're
comfortable, in, in coming forward and reporting misconduct when,
when and where it happens

Mitch: (06:10)
So let's talk a little bit more about your thought process when
it comes to this whole situation here. Obviously you looked at
these outcomes and recognize there's a gap or there's
insufficient resolutions going on. So what did you really try to
come up with as far as a need that you recognized when evaluating
these outcomes and where did your thought process take you,
before we get into these actual innovative solutions?

Neta: (06:36)
Sure. The few guiding principles, that have guided us in looking
at this is that we need to look at, these legacy solutions and
processes that are in place, and we need to completely, reinvent
them by putting the employee at the center of the experience,
right? So we need to look at the solution from the outlook of the
employee, because essentially we want to encourage people to come
forward and report more. So when we're thinking about creating
this new employee centric experience, we need to consider several
things. Technology is just one of them. It's really, it's an,
it's a very important element of it, but it's just one of the
elements. And indeed, you know, this we're, you know, the year is
2020. people communicate through their phones through, apps.
They're used to digital solutions that are serving them. That's
how, that's how the workforce is communicating today, and it's
important to bring those solutions forward, to meet, uh, where,
where we are and to meet your employees where they are. So
that's, that's the first element. The second element is to do
with trust and, and there's, you know, that's really important to
highlight that trust can only be rebuilt if there is a direct
communication between reporter and company. Be it, if the
employee is anonymous or not anonymous, it's really important to
create that trust internally, and we can do that by taking the
intermediary outside of the equation and empowering people to
come forward and report.  The third element is to do with
psychological safety. So one of the things we looked at with our
technology is not only how you create a sense of, you know, not
only how you digitize the old ways of reporting, but how you can
really create a sense of psychological safety, and, empower more
people to report who would have otherwise not reported misconduct
when they experienced it. So we were thinking about how can that
be created, and  recreated the technology in a way that
empowers people to speak up still safeguards everyone's data and
privacy from each other, but ensures that people have that sense
of, what we call a blind network and t...