Ep. 94: Neta Meidav - Internal Ethical Reporting

October 26, 2020 | 17 Minutes

Neta Meidav, co-Founder and CEO of Vault, joins Count Me In to talk about the benefits of a new internal ethical reporting platform and how it can help organizations overcome the pitfalls of their traditional reporting procedures and whistleblower policies. Trusted and transparent standards for reporting workplace misconduct makes employees 8% more likely to report such cases, and technology backed by proper research can do just that! Download our episode and listen now to hear more about ethics, reporting, and Vault, the technology which underpins today's Cultural Workplace Revolution.

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

Vault: https://vaultplatform.com/

Adam: (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 that being part of a network of other people, and the ability to come forward and, and report, jointly. And that psychologically, that creates a very, a very meaningful effect on people, willingness to come forward.

Mitch: (09:28)
So let's get into the actual solution, now. What are some of the new internal ethical reporting practices that you identified? And I know just taking a step back, you talked a little bit about technology, but, how exactly is it being utilized in this process to better support the employees that you're targeting?

Neta: (09:47)
Sure. So maybe I'll start by describing it from the employee side of things, because our, our platform is indeed an end to end platform. So it services the employee, but also the employer in managing more effective and timely investigations, from the employee perspective, Vault acts as a safe space. So just like the name suggests it's a place in which, they can create safe, a safe, record of an event that they have observed, or experience at work, including the opportunity to, read any of the companies, policies or any of the content of the company wants to, push, to the forefront, of the app. So essentially employees can create safe records, save evidence of any events that happened to them, such as screenshots or any other events, and our technology would then timestamp that record on the employee phone. So that timestamp means that when the company investigates the case, they have full visibility into the date in which the record has been taken, even if there's been quite a gap between the time that the event has been taken and when it was reported. And that is very much there to assist the investigation, in terms of its quality. When it comes to coming forward, there are different ways in which employees can come forward and report misconduct, but they're all at the end of the day, they're all internal, right? So you would report to someone within your own organization, and those different ways are, anonymous, not anonymous and a third, route is called go together, which essentially means I will submit my complaint if I'm not the first or only one to be experiencing this issue either by an individual or experiencing a problem that I've just observed. And, our technology then connects the dots on these repeated patterns of harm when a threshold of two or more is being met. It's being released to, to the company. And what we found is that people are up to eight times more likely to report knowing that they're part of a wider group, knowing that they are part of a pattern. So that's an extremely powerful tool for companies that really want to know what's happening at the stern of the ship. Additional innovation that is really important is that when people do come forward and report, they have the opportunity to have direct channel of communication with their case managers. So it looks like, any messenger software on your, from your app. So it would remind you of your WhatsApp or your, Facebook Messenger, but it will maintain your anonymity if you chose to come forward as anonymous, but it would still allow the company to ask you as a reporter for any additional information and anything else that they need to know, and send you any message that they need to send. And that is a direct, again, a direct channel, which became very, very important, especially during COVID times when people's appetite of reporting is even more reduced than usual given job insecurity and the, and the volatility in the market. So it became an incredibly important channel for people to communicate with their employer be it anonymousy or a name.

Mitch: (13:39)
This is all really interesting, and I'd like to keep talking about this, but I know we need to wrap it up. So I just have one more question for you. I know you mentioned employees are 8% more likely to report cases, I believe is what you said, because of being able to create or connect these patterns. But do you have any other data, you know, maybe some resolution data or additional, additional usage that you could share with us, and are there any other possible future improvements to this internal ethical reporting practice that you're considering at this point in time?

Neta: (14:11)
Sure. So I mean, we're, you know, we're very cautious on data. One of the things that you should know about us is that actually we collect as a company, very little data, on our, on our customers. We've, taken a very, very serious approach to data privacy. And we respect, the fact that one of the advantages of using a technology as opposed to a third party service is the fact that you can keep things to yourself as a company. So we indeed we collect very little data, but one of the things that I can share is that, by using, by putting vault in place, we always see an uptick in reporting. We, it's not, you know, it's not, no one needs to fear that it becomes something, that is overwhelming, but there is always uptick in reporting. And that's a good thing. That means that, that essentially, employees are entrusting the system with their misconduct stories and be able to come forward and report ethical breaches when they happen. What we also see, and that we know, clients are telling us is that usually the fact that the trust is happening is not all due to just the mere use of the app. Though of course, that's really innovative and helpful, but it's the fact that your employer has put something like this in place and communicated about it the way they did. That makes a huge difference for people,people's perception of how important this issue is to their employer. And, that on its own is a big encouragement for people to come forward and report. So, you know, intention matters and it's a great opportunity, to say to your employees, your people, we're not just taking a box here, we really are interested in hearing you and we're giving you the best opportunity out there to speak up.

Closing: (16:22)
This has been Count Me In, IMA's podcast, providing you with the latest perspectives of thought leaders from the accounting and finance profession. If you like what you heard, and you'd like to be counted in for more relevant accounting and finance education, visit IMA's website at www.imanet.org.