19/09/2022 |

Whistleblower System According to EU Whistle­blowing Directive – A Guide

From 2023, it will be mandatory for companies, authorities and organizations with 50 or more employees to create a whistleblower protection system. Learn what needs to be considered and how OTRS can support you.


What is the EU Whistleblowing Directive about?

The aim of the EU Whistleblowing Directive is to offer greater protection to those who report violations of European law and thus want to help uncover them.

The European Union required its member states to transpose the new Whistleblower Protection Directive into national law by December 17, 2021. The directive represents the biggest change in compliance requirements for companies, authorities and organizations in years.

Whereas the directive previously only applied to organizations with more than 250 employees, the provisions will become considerably stricter as of 2023. At this point, the directive must be implemented for organizations as small as 50 employees.

Employees who report violations must now have reporting options, be protected and not fear any negative consequences for themselves. Whistleblowers who report violations of EU law are protected from dismissal, suspension, demotion and other forms of discrimination. This protection extends to employees, former employees and third parties such as service providers, shareholders or suppliers.

When will the directive be converted into national law?

The German cabinet passed a government draft on July 27, 2022, thus initiating the legislative process. Non-compliance can lead to legal consequences, financial penalties and serious damage to corporate reputation, among other things.

Why is whistleblowing important?

Lack of concerns doesn’t mean good news.

Just because reports are not made, it does not mean there is no workplace misconduct. In fact, 85% of Europeans believe that employees rarely or never report their concerns. It is beneficial to encourage employees to raise their concerns so they can be identified and resolved earlier instead of leaving situations unchecked that can quickly escalate into a crisis.

Whistleblowing helps to uncover grievances.

The fact that the term whistleblowing is usually perceived as negative must change. Here, management, in particular, is called upon to create a correspondingly positive perception within the company and to establish a corporate culture in which talking about and reporting grievances is expressly desired. Certainly, the quality of reports is more important than the quantity, but it is a misconception to think that receiving whistleblowing reports is a sign of an unhealthy corporate culture and poor corporate performance. In fact, companies that receive a high number of whistleblowing reports are 46% less likely to face negative media coverage.

An effective whistleblowing procedure benefits the compliance program.

Organizations that implement a successful whistleblowing process can gain additional insight into the mindset of their employees. Organizations that recognize whistleblowing as an important source of information find that managers have better information to make decisions and control risks. Therefore, management should strengthen the culture of the organization by integrating the whistleblowing system within the broader
governance, risk, and compliance framework of the company.

It is far more beneficial to encourage employees to voice their concerns so they can be identified and resolved early instead of leaving situations unchecked that can quickly turn into a crisis.
Andreas Bender

What makes a whistleblower system successful?

Whistleblowing is a process whereby a whistleblower reports a specific misconduct, wrongdoing or illegal act to an authorized person. The first step to establishing a successful ISO 37002 Whistleblowing Management System (whistleblower system) is the appropriate implementation of GRC (Governance, Risk and Compliance) in the company. A whistleblowing system can only be successful if employees have a positive attitude and also the necessary degree of loyalty to the company. Actions are required here to help employees identify with the company’s goals and values.

Consent to the whistleblower system

An important tool is putting this in writing. A code of conduct is particularly suitable for providing information about goals and values. These documents can also be expanded to include a whistleblowing policy. This way, employees know which behaviors constitute whistleblowing and should be reported, which contacts and reporting channels are available, and how further investigations may proceed. This information creates transparency and trust in the whistleblowing system.

Conviction that use of the whistleblower system makes a positive contribution to compliance

Employees must be convinced that they can contribute to positive change in the company through their active participation in the whistleblowing system. The common goal is not only to stop or investigate reported misconduct, but above all to prevent misconduct. The most important prerequisite for this is that the communicated values and goals are exemplified by the organization/company management.

Transparency in the process and trust in compliance

A whistleblower program only works if internal and external whistleblowers have confidence in the program and its associated processes. To achieve this, whistleblowers must feel safe from negative retaliation and know that any report will be promptly and thoroughly investigated. In a survey of workers, 80% said they do not report wrongdoing because they fear legal consequences. 35% said they believed nothing would be done anyway.

Different reporting channels for whistleblowers

Employees will have different preferences when it comes to which reporting methods they use to raise concerns. The EU Whistleblower Directive mandates that these channels be made available and can be used.

Internal reporting channels

To maximize employee participation in a whistleblowing management system, different internal reporting channels must be available. These include, for example, telephone, a web form and trusted human contacts.

External reporting channels

In addition to the aforementioned internal reporting channels, the possibility of external reporting to certain authorities must also be ensured.

Unlike in the past, employees now have an external channel too. It is, therefore, all the more important to gain the trust of employees and create incentives for the use of internal reporting channels.

Whistleblowing Process:

Whistleblowing process

How can OTRS support you?

OTRS Group specializes in automating business processes/BPMS. With our expertise, we create processes in close cooperation with our customers that are perfectly tailored to their requirements.

The reporting process must be known.

In order for employees to be able to use the reporting process, the various reporting channels, such as email, a web form or a contact person in the company, should be known.

Make information available

Also, use guides for writing notices, e.g. in the form of Knowledge Based Articles (KBAs ) in your knowledge management system.

Take advantage of forms

In order to obtain all the necessary information, it is important to record the respective notice as comprehensively as possible and, above all, in a structured manner to ensure rapid processing.

The five W-questions

Orientation is provided by the five W-questions, all of which should be answered as far as possible when filling out an online form:

  • Who?
  • What?
  • When?
  • How?
  • Where?

The request for information should be designed in such a way that the information given is also comprehensible to outsiders. Depending on what is possible with the chosen reporting channel, it makes sense to allow additional questions – of course, while maintaining anonymity or protecting the whistleblower’s personal data, if available.

Do you have questions about how OTRS Group can help implement a whistleblower system in accordance with the EU Whistleblower Directive? Our experts will be happy to assist you.

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