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About "Companies with Many Whistleblowing - Top 100 Ranking"

A Japanese media, Shukan Toyo Keizai Online, has issued "Companies with Many Whistleblowing - Top 100 Ranking" again this year.

The article says whistleblowing is an effective way of avoiding compliance miss, which I agree. However, the article shows a list of Japanese companies in the order of the total number of whistleblowing cases, without considering the total number of employees. This does not seem to make sense. What matters is to have an opportunity to fix the problem by letting employees raise concerns at an early stage when the irregularity is still minor so that the company cay avoid major miss (see my previous blog, "Why is employee hotline that important?"). In other words, "How many do we have?" is not the right question. The right question is, "Are we listening to them?" Thus, the number of cases per employee is the indicator, not the number of whistleblowing itself. Comparing the total number of cases without considering the number of employees would not make sense at all. Shukan Toyo Kaizai's article goes on to state that "the top 63 companies total number of cases are beyond 100", that does not tell us anything meaningful.

The article, however, correctly recognizes that "one way of looking at these numbers is to compare them with the number of employees." What is interesting in this article is that it says "1 case per year per 100 employees" may be an indication of whistleblowing system's (appropriately) functioning. As you may know, according to NAVEX, one of the major service providers of employee hotline, the median of cases per 100 employees in 2018 among its client companies is 1.4.

The article also refers to the number of whistleblowing in Kansai Electric Power (KEPCO) that has major compliance misses this year. According to KEPCO's 2019 CSR & Financial Report (in English), "the number of cases handled by the Compliance Hotline" in their fiscal year of 2019 is 73 (p. 75), and their total number of employees on a consolidated basis is 32,597 (p.119). Thus, the number per 100 employees is 0.22, lower than the median of 1.4. The data shows that KEPCO's number was not healthy.

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