The Whistleblowing System

The whistleblowing system in the company

Compliance is playing an increasingly important role, even in small and medium-sized enterprises. Whistleblowing systems are an effective mechanism for identifying compliance violations at an early stage. Digital whistleblowing systems in particular are on the rise. With the EU Whistleblower Directive, an important legal impulse was set for the protection of whistleblowers. In addition to this “whistleblower protection”, the directive also addresses the mechanism, i.e. the whistleblowing system. What exactly is this mechanism about?

Definition whistleblowing system

A whistleblowing system is designed to give whistleblowers – whether employees or external groups, such as suppliers or customers – the opportunity to communicate unethical or illegal behaviour in the company confidentially and anonymously to an intended reporting recipient. 

A whistleblowing system can therefore basically be defined as a reporting channel that is both secure and confidential. This channel is designed to enable whistleblowers to submit reports anonymously. These reports are very valuable for your company: the observations can be followed up internally thanks to the report and internal investigations can be initiated if necessary. In this way, you can avert damage to your company and prevent criminal proceedings or other negative consequences.

Possible communication channels

Now you might be wondering what such a reporting channel looks like that can be used as a whistleblowing system? These channels include:

  • Mailboxes: the traditional suggestion box enables communication mostly in only one direction 
  • Call center: a hotline enables person-to-person communication
  • Ombudsperson: for example, a lawyer acts as a mediator between the parties (company on one side and whistleblower on the other)
  • Digital whistleblowing system: often have a real-time chat. Whistleblowers can submit reports regardless of time and place using any internet-enabled device.

The EU Whistleblower Directive does not contain any specific requirements as to what type of channel is permissible. However, it does set concrete requirements for the whistleblowing system to be introduced. Anonymity is particularly important for building trust. This poses a problem especially for companies that use call centers or ombudspersons as a reporting channel. While these must be confidential, the inhibition threshold for a potential whistleblower to speak to a “real person” over the phone should not be underestimated. Telephone communication channels cannot offer complete anonymity. A digital whistleblowing system is therefore not only a directive-compliant solution for your company, but also one that can earn higher trust among your employees. 

How does your company benefit from a whistleblowing system?

In addition to meeting the legal requirements under the EU Whistleblowing Directive, a whistleblowing system has multiple benefits:

  • Protection of employees and the company from penalties, sanctions and reputation damage
  • Strengthening your reputation towards your customers, partners, banks, investors and employees
  • Promotion of a corporate culture characterized by a constructive culture of failure
  • Function as an early warning system for identifying and combating grievances
  • Basis for successful risk management: if the whistleblower trusts the company’s internal channel, reports are less likely to reach external parties. The problems can be dealt with internally and the risk of potential reputational damage is reduced.

The advantages of a whistleblowing system cannot be denied. If you would like to learn more about whistleblowing, please take a look at our Know-How page.

Are you already considering how to implement a whistleblowing system in your company? Then download Your guide to comply with the Whistleblowing Directive in your company”. Or contact one of our experts for a personal consultation.

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