Directors and executives play a pivotal role in safeguarding corporate compliance. Workplace scandals can result in substantial financial, reputational and cultural harm. A strong speak-up culture that’s supported by timely and trusted reporting remains one of the most effective ways to mitigate these risks.
Research on whistleblowing in the U.S. sheds light on how employees’ perceptions of their employers influence whether misconduct is reported and how risks are addressed. By understanding the importance of a speak-up culture and its connection to risk management, directors can establish these links and implement best practices to create and maintain a safe and transparent work environment for employees.
Why a Speak-Up Culture Matters for Corporate Governance
A speak-up culture is an organizational culture that promotes transparency and trust within the workplace. Fostering a speak-up culture encourages employee reporting, which helps organizations address unethical behaviors before they escalate. Without a culture of ethics and safety, a business’s reputation could be marred by scandals, leading to financial losses due to lost stakeholder trust and lower employee retention.
It’s clear that employee reporting plays a crucial role in addressing misconduct. As a result, workplaces should integrate open reporting channels (e.g., anonymous telephone hotlines, web forms or AI chatbots) that align with the principles of transparency, accountability and ethical leadership. These factors all underpin a speak-up culture.
But it’s not just up to the employee level. Boards and directors play a pivotal role in shaping trust in reporting systems. By explaining to employees how to submit reports, where to report and how reports are addressed, employers can communicate the importance of transparency at their organizations.
Employee Experiences with Whistleblowing
AI and Whistleblowing: Through the Employee Lens, a 2025 research study from Case IQ, reports vital data that could shed light on employees’ experience in reporting. According to the report, 81% of employees reported witnessing workplace misconduct, including unethical or illegal behavior. Yet only 72.7% of those employees reported the issues.
This presents a glaring gap in reporting, which can make it difficult for directors to address and prevent risks to their organizations. The research further states the top reasons employees fail to make reports are due to fear of workplace retaliation, including from their peers or management. Many employees don’t report because they’re afraid they may lose their positions or stunt their career growth.
Concerns Around Whistleblowing
The report finds that many employees are not fully confident their workplaces would protect them from retaliation. Nearly one-quarter of employees show signs of low confidence or none at all when it comes to their organizations protecting them. This point is further supported by the fact that 33.2% of employees reported witnessing retaliation against whistleblowers at their company.
Although these numbers may come as a shock, the report offers insights into how to support them effectively. Employees stated their preferred reporting methods include anonymous phone lines and AI-powered chatbots, surpassing speaking directly to their HR departments. This highlights employees’ preference for confidential reporting channels.
The rise of AI has also shifted employee attitudes, with 69.8% of employees expressing no concerns about AI-powered whistleblowing systems. Due to a preference for anonymous digital reporting methods, whistleblowing tools that incorporate AI can encourage more reports and could be a major factor in fostering employee trust.
The Link Between Speak-Up Culture and Risk Management
A director’s fiduciary duty includes anticipating and mitigating enterprise risks. Fostering a speak-up culture helps encourage reporting, which acts as a frontline control measure for risk management. When employees trust that their concerns will be taken seriously and handled without retaliation, organizations gain access to a critical stream of early-warning information. This helps boards and directors identify and address fraud, misconduct or ethical lapses before they escalate into scandals that may have otherwise gone unnoticed.
Keep in mind the statistic from earlier: Many U.S. employees who witnessed misconduct chose not to report it, citing fears of retaliation or skepticism that their organizations would act. Each of those silenced voices represents a missed opportunity to prevent risk before it grows into a costly crisis.
Organizations that normalize speaking up and make reporting feel safe benefit from greater visibility into their risk environment. For directors, this visibility is invaluable, as it equips the board with data to address noncompliance and guide compliance initiatives, strengthening the corporate governance system.
Best Practices for Directors
Directors have a responsibility to create an environment where employees trust their reports will be addressed with care. Boards can strengthen this trust through four key areas:
Reinforcing psychological safety. Employees are more likely to report misconduct when they believe they won’t suffer retaliation. Directors can communicate a zero-tolerance stance toward retaliation by ensuring policies are backed by swift and visible enforcement when it does occur.
Offer flexible and confidential reporting channels. Employees tend to have a strong preference for confidential and anonymous reporting methods, such as digital hotlines and AI-enabled chatbots. By offering multiple channels, boards demonstrate their commitment to employees and recognition of their wishes.
Emphasize transparency in whistleblowing systems. Transparency is a critical trust-builder. Research finds that 82.7% of employees want workplaces to be clear about how AI is used in whistleblower systems. Explaining how reports are processed, how data is protected and how AI reduces exposure and bias can significantly increase confidence in reporting.
Demonstrate accountability through feedback. Directors should ensure organizations communicate the outcomes of whistleblowing programs, whether through aggregate reports, policy updates or training sessions. Even if they are unable to share individual cases in detail, showing employees that reports lead to action reinforces confidence in the system.
Speak-Up Culture as a Governance Imperative
A speak-up culture is central to effective corporate governance and risk management. Research from 2025 makes clear that employees want safe, confidential and transparent reporting options, and organizations that provide them gain access to critical early-warning signals. For directors, the message is thus: Fostering trust in reporting systems protects employees, strengthens compliance and reinforces the organization’s resilience and integrity.