The Whistleblower Hotline service, an addition to the company's Shareholder Prism software, lets employees at a company use e-mail, voicemail and other network-based forms of communication to hold confidential discussions with board members sitting on the audit committee. The service comes at a time when corporate America is increasingly feeling the regulatory heat, following major accounting scandals at such companies as Enron and WorldCom.
Under Section 301 of the Sarbanes-Oxley Act, which took effect Friday, public companies need to establish procedures whereby employees can anonymously log accounting and auditing complaints. They also need to establish methods for collecting, retaining and treating those complaints.
"Providing employees with a variety of standard, confidential methods of communicating concerns is a key to restoring investor trust, integrity and confidence," said Steve Schultz, director of corporate governance programs for Shareholder.com, in a statement.
Congress enacted the Sarbanes-Oxley Act last year, but various sections of the act will be rolled out over time. The new legislation basicallyand seeks transparency in companies' accounting procedures.
Under the new law, a company needs to have at least one "financial expert" on its audit committee. And each director on the committee is required to be "independent," meaning she or he cannot be an employee, a consultant or affiliated with the company. The law also bans companies from issuing new loans to their senior executives or directors, as well as forbidding companies to materially modify or renew existing loans.
Shareholder.com's new service includes point-to-point encryption for Web messages, a confirmation message of all hotline discussions and the ability to handle information from employees in other countries. The company also offers software and services for investor-related activities such as Webcasting earnings announcements.
Meanwhile, companies like Computer Associates International and others are. And a number of other companies are adding that responsibility to the list of things expected of existing executives.