What do you need to consider when choosing a whistleblowing system?
Are you looking for a whistleblowing system for your company? There are a variety of systems available, but they differ in essential aspects. First of all, it is a good decision that you have decided to implement the requirements of the EU Whistleblower Directive! This way you significantly reduce your risk of scandals, reputational damage and penalties. You will know when something is going wrong in your company and can proactively take countermeasures at an early stage.
What guidelines must be fulfilled in your whistleblower system?
The EU does not give specific instructions on how to implement the directive. A variety of solutions are offered on the market. Of course, the question now arises: Which whistleblowing system suits me, my company and the existing infrastructure best?
The introduction of a whistleblowing system can serve the pure fulfilment of obligations, but can also be used specifically as an instrument of personnel management. With the appropriate communication, you give your employees the signal that they, too, bear corporate responsibility and that their behaviour is also crucial for the long-term success of their employer.
Choosing the right whistleblowing system for your company is a strategic decision. It should fit for many years and must stand the test of time. This article is intended as a decision-making support to help you find the right solution for your company.
First of all, check whether your company is actually affected by the EU Whistleblowing Directive!
Less than 50 employees
You are only obliged to implement a whistleblowing system if your company is subject of the Money Laundering Act, even if you have less than 50 employees. Depending on the industry, the requirements of the relevant authorities are more than ten or more than 20 employees. With regard to the whistleblowing system, you have the choice between your own system, where you specify the recipient, or an external system offered by the chamber. Should a case be reported in your company unexpectedly, this information would then directly be with the chamber.
50 or more employees
With this size of company, you are obliged by the EU Whistleblowing Directive to offer whistleblowing reporting channels for your employees. Companies with up to 249 employees are likely to have more time to implement a whistleblower system.
You have the agony of choice – you will need to take the following criteria into consideration:
- Company size & internationality
- Convenience & availability
These criteria can help you decide whether a digital or an analogue solution is more suitable for your company. In the following, we will go into the individual criteria to bring you some clarity.
Whistleblowing system: Does your IT infrastructure allow a digital solution?
Decision criteria: Company size and internationality
The size of your company often determines the number of options you have. Does your company have its own IT department that can support the implementation process of a conventional online solution on the company side, which takes several weeks? If so, all digital and analogue options for the design of a whistleblowing solution are an option for you.
With increasing company size, the number of possible reports increases statistically. It is particularly interesting for internationally operating corporations with a large number of reports to implement whistleblowing software with very differentiated evaluation options, e.g. according to legal areas, countries, locations or company divisions. For small and medium-sized companies with only a few cases per year, a multitude of complex evaluation options are unnecessary.
Criteria for decision-making: Comfort and availability
You are a small or medium-sized company and the memories of the last software introduction and linkage with your existing IT system still trigger horror in you and your employees, as they do in many other of our customers? Or do you not have your own IT department in your company that can take over the support of an implementation process lasting several weeks?
Then you should consider a platform solution that does not require implementation in your IT landscape. How does that work? With “software-as-a-service” solutions, where the data is in the cloud. Such a whistleblowing system is also called a plug-and-play solution. However, it is worth taking a closer look here. It is only really a plug-and-play solution if you receive a link with the booking without any implementation effort. By using this link, you directly land on your company’s page on the whistleblowing platform.
Analogue solutions: Strengths and weaknesses of the established classical solutions
The purpose of whistleblowing channels is to enable anonymous and confidential communication between a whistleblower and a company. It is crucial that it is not only about receiving information about misconduct or violations of the law. If a company wants to use these reports to take internal countermeasures and avoid greater damage, additional information is often required. This information can only be obtained by asking the whistleblower.
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How to recognise compliant whistleblowing systems
As the comparison of the advantages and disadvantages of analogue systems has shown, they have many weaknesses. For example, the anonymisation of data or the communication of the current processing status of the report is not guaranteed. This makes these systems less suitable if the whistleblower system has to meet EU standards. But how do you find the right digital system among a multitude of offers?
These are the points a whistleblower system must fulfil in order to comply with the Whistleblower Directive:
- Does your company operate globally or with a focus on the EU? Global providers are not a suitable solution for every company: a server location outside the EU can jeopardise the protection of the whistleblower and violate data protection guidelines.
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Data security is non-negotiable in a whistleblowing system! In addition to the requirements of the GDPR, other aspects of data security need to be considered when choosing a suitable system for your company. Who has access to the regular communication channels of your company?
Find a whistleblowing system that fits to your company
When choosing an appropriate whistleblowing system, many specific employee factors are relevant. Functions, education level, nationalities and locations influence access to reporting channels and the inhibition threshold to use them. Addressing a specific person directly usually takes the most effort.
Using a digital solution that guarantees anonymity requires the least effort. Even with a low level of education and low income, all employees now have a mobile phone and know how to use it. If the digital whistleblowing system is designed to be very intuitive and user-friendly and uses understandable language, it can be used by any employee.
Do you want to process reports of violations internally or delegate the processing?
No doubt, serious violations of the law or reports with scandal potential are a matter of top management! But not their receipt or legally correct follow-up and documentation.
The options at a glance
Inhouse solution
- Reception & processing by in-house person or department
- Requirement: Person should be considered trustworthy by both the management / corporate management and the employees
External contact persons
- Additional external unit as recipient helps to reduce inhibition thresholds
- Your trusted lawyer or tax advisor is a potential recipient, or an external ombudsperson
Experience has shown that whistleblowers often reveal their identity over time if, after sharing a report, they feel that their report will be taken up and dealt with in a professional way. By treating whistleblowers with respect, the selection of a suitable whistleblower system removes inhibitions about reporting.
External partners have a professional distance per se and thus have a confidence-building effect on the whistleblower. The experience of your external partner makes it possible to decide on the relevance and the requirements for further action when a report is received. In addition to professional processing, the observance of all relevant deadlines is covered.
The introduction of a whistleblower system: What do you need to consider?
To avoid this risk, you should choose an open, proactive approach when introducing your reporting channels. The spectrum is wide and ranges from a simple email informing your employees about the topic of reporting channels to deliberate embedding in a comprehensive compliance system.
Minimum risk solution
Since we are asked this question again and again, this much in advance: of course you can hide every reporting channel almost invisibly on a sub-subpage of your intranet without specifically communicating its existence to your employees. This way, you can at least prove that you offer such a solution in the event of an audit. However, you run the risk that a potential whistleblower will not find this reporting channel and turn directly to an authority or the press.
Prevent future misunderstandings with targeted communication
How you implement your whistleblowing system (or any other reporting channel) determines which reports end up with you and whether employees abuse the system. We give you important aspects to explain how to introduce the whistleblowing system to your staff.
- What incidents should be reported?
- How does a notification work and what information is helpful?
In practice, short lists in the form of a code of conduct or a formulation of the company values are helpful for the interpretation of incidents. Here, as in the selection of the system, all content should be appropriate to the company and formulated in a way that is understandable for all employees.
What influence does employee satisfaction have on the use of the whistleblowing system?
Relevant for the use of reporting channels is the perceived psychological safety of the whistleblower. The lower this is assessed, the greater the need for an anonymous reporting channel will be. In other words, to what extent do employees feel that their reports are taken seriously and that constructive solutions will be found?
The basis of this assessment in the company is often the error culture, i.e. how mistakes were dealt with in the past. Was responsibility taken in the case of misconduct or was there an attempt to deflect attention from oneself?
It is also important when assessing the well-being of employees that not only the culture in the company as a whole is taken into account, but that individual employees are addressed. The culture in the workplace and in the close departmental environment may be different from the company as a whole.
This means that you should definitely choose reporting channels that allow anonymous sharing of reports. In addition, you can offer the option of a confidential conversation.
Whistleblowing system: expensive bells and whistles or also something for medium-sized businesses with tradition?
A whistleblowing system enables the whistleblower to submit reports anonymously and confidentially from any internet-enabled device. Additional information relevant to the report – such as pictures, documents, drawings, etc. – can be uploaded directly.
Upon receipt of the report, the system automatically initiates the notification of the person in charge that a new report has been submitted. This is important because the EU Whistleblower Directive sets requirements for processing, which have specific deadlines. Within one week, the whistleblower must be informed that the report has been received. Within three months, or in exceptional cases six months, the whistleblower mus be informed about the outcome of the investigation into his or her report. The system monitors compliance with the deadlines and provides reminders in due time.
The advantages of digital whistleblowing systems for every company at a glance:
- They deliver better quality reports: anonymous, real-time communication with whistleblowers.
- Questionnaires that can be individually adapted to the company are possible.
- They are user-friendly and intuitively understandable.
- They offer more control and transparency in the processing.
- Qualified support answers your questions.
- Cloud-based whistleblowing software products in particular are usually inexpensive.
A "change of perspective" makes the decision easier
What would I need as an employee to take the risk of reporting misconduct or a violation of the law by colleagues or superiors?
Put yourself in your employees’ shoes – not as a general rule, but as individual, concrete persons. Empathise with cautious, reserved, extroverted and self-confident people, people with different levels of education and different cultural backgrounds, and those with very different leaders. Looked at from the perspectives of these individuals: What would help you trust that your report will be followed up and dealt with constructively? What would you need to eventually speak up?
Our recommendation: a cloud-based whistleblowing system
Particularly for companies with more than 1,000 employees, a cost-effective whistleblowing system is advisable, in which both internal and external persons perceived as trustworthy receive and process the reports. Should whistleblowers wish to speak up over time, the possibility of direct confidential talks with these persons should be provided.
Due to the IT infrastructure and data security requirements, we recommend a simple, user-friendly platform solution with the highest security standards, where only those authorised by the system have access to the reports and are able to process them in accordance with the guidelines. These solutions also ensure that you meet all deadlines and can use the reports to successfully resolve grievances.
LegalTegrity is one of these modern whistleblowing systems. The data is stored in Deutsche Telekom’s cloud in Germany and is protected from unauthorised access by the highest security standards. Without any implementation effort, you receive a link with direct access to the platform with your booking. You can communicate this link, for example, in the form of a QR code on your intranet, on your notice board or as part of the welcome package for new employees. Only the persons you deposit in the system as recipients for reports can log into the system administration and read, process and communicate with the whistleblower on incoming reports.
As a next step, download our guide “How to comply with the Whistleblowing Directive in your company?”. Or contact one of our experts for a personal consultation.
