Minimizing whistle-blower risks: 10 best practices

Experts have several recommendations for firms to follow to avoid SEC scrutiny in light of the Dodd-Frank Act's whistle-blower provision:

• Examine hotline and reporting procedures to ensure the company is getting information about wrongdoing early enough.

• Encourage workers to use the internal procedures.

• Conduct internal investigations, perhaps by an independent third party.

• Consider improved promotion of the hotline program.

• Introduce more training and orientation to employees.

• Reassure workers they will not be retaliated against if they report wrongdoing.

• Reward whistle-blowers who report problems internally.

• Periodically survey compliance programs to monitor their effectiveness.

• Establish an ombudsman program.

• Exercise greater diligence in hiring practices to avoid potential whistle-blowers.