Why are whistleblowing channels so important - and who does it protect?

Working one's way around the world of whistleblowing and complaint channels can be challenging for businesses striving to maintain compliance and foster a culture of transparency. So, where should HR and compliance departments begin when embarking on their own journey to implementing a whistleblowing platform for their workplace?

In this blog, we’ll look at the essentials of whistleblowing platforms - (also known as mandatory reporting channels) - covering what they are, which companies need them, the types of violations that can be reported, and the essential requirements for an effective whistleblowing system. We’ll also provide actionable insights to help you achieve your compliance requirements.

What is a whistleblowing channel?

A whistleblowing channel is a designated pathway for employees or individuals to report concerns or suspected misconduct, such as fraud, corruption, or illegal activities, within an organisation.

Is it mandatory?

These channels are sometimes referred to as mandatory reporting channels because they are often legally required in specific industries or countries to ensure transparency, accountability, and compliance with regulations. For example, the EU Whistleblowing Directive mandates that companies in member states establish internal reporting channels to ensure confidentiality and protection for whistleblowers.

Which companies are required to have a whistleblowing platform?

According to the EU Whistleblowing Directive, companies and public sector organisations in member countries must establish a mandatory reporting channel based on their size and nature. This applies to:

• Private Sector: Companies with 50 or more employees. Some member states may extend this obligation to smaller companies, especially those in high-risk sectors.
• Public Sector: State, regional, and local organisations. Smaller municipalities with fewer than 10,000 inhabitants may be exempt, depending on member state regulations.

EU member states can set more stringent requirements, meaning specific rules may vary. For instance, in Spain, the Directive (Ley de Protección de Informantes) mandates that companies with 250 or more employees and public sector entities implement a whistleblowing channel.

Deadlines for implementation

The EU set December 17, 2021 as the deadline for transposing the Whistleblower Protection Directive into national law. However, some countries are still in the implementation process or have recently completed it.

Which violations can be reported?

Whistleblowing channels address a wide range of misconduct, including:

• Financial fraud and violations in financial services
• Bribery, corruption, and money laundering
• Regulatory violations
• Employment law violations
• Public health and safety violations
• Animal health and welfare violations
• Product safety and compliance violations
• Environmental violations
• Theft or misuse of company assets
• Data privacy breaches
• Ethical violations

How does the reporting channel work?

Setting up a reporting channel typically involves:

• Reporting the Concern: Employees or stakeholders report suspected misconduct through secure channels.
• Assessment and Investigation: Designated personnel review and assess the report to determine its credibility and need for further investigation.
• Providing Support: Offer support services like legal advice and counselling to whistleblowers.
• Resolution and Remediation: Investigate the report, determine its validity, and decide on appropriate actions.
• Feedback and Follow-up: Update whistleblowers on the report’s outcome within a specified period.

What do I need my whistleblowing software to provide?

This type of reporting channel has two types of users: the reporters (your employees) and the case handlers (your team). As a result, the key requirements generally include:

• Confidentiality: Protect the whistleblower's identity and information in the report.
• Anonymity: Allow anonymous reporting, especially where required by law.
• Accessibility: Ensure the channel is easily accessible with multiple reporting methods.
• Procedural clarity: Establish and communicate clear policies and procedures for the whistleblowing process.
• GDPR compliance and IT security: Adhere to GDPR standards and implement IT security measures like end-to-end encryption.
• Flexible case management: Adapt processes to the unique needs of each report.
• 24/7 availability and multilingual support: Provide round-the-clock service in various languages.
• Reporting and feedback: Offer reporting pages, reminders, and feedback to whistleblowers.

You can learn more about implementing a whistleblowing channel here <link to blog>

Why a Reporting Channel is Beneficial

Beyond legal compliance, a well-implemented whistleblowing channel:

• Fosters integrity: Encourages a culture of transparency and accountability.
• Identifies issues early: Helps address problems before they escalate.
• Ensures compliance: Identifies gaps in compliance programs and allows corrective measures.
• Protects from damage: Mitigates the risk of legal actions, fines, and reputational harm.

Conclusion

A comprehensive whistleblowing channel is crucial for maintaining compliance and fostering a transparent work environment. By following these guidelines, organisations can create a system that supports ethical behaviour and accountability, protecting both the company and its employees.

‍