Whistleblower scheme – more than just compliance

Let's begin by looking at the characteristics of a good whistleblower scheme. Generally, the compliance part should of course be in place. In other words, the scheme should meet the applicable laws in this area at any time. But, this is - so to speak - only the entry ticket.

In addition, we believe that three criteria should be met to make your whistleblower scheme really valuable:

• Accessibility: If you company is to benefit as much as possible from your whistleblower scheme, you should also ensure that it is easily accessible to your employees and isn't just hidden somewhere on your intranet.

• User friendliness: It should be easy and intuitive to use the scheme so that your employees don't refrain from this because it's too difficult to make a report.

• Confidence: It is also important that the employees are confident that their reports are handled in an appropriate way, including that the persons handling the reports have integrity and can be relied on.

Because it is, actually, an advantage for both your company and your employees to have a whistleblower scheme that is used.

In most companies, something will happen, at some point in time and to some extent, that should be reported through a whistleblower scheme.

Therefore, it's not necessarily a measure of success if your whistleblower scheme doesn't receive any reports.

On the contrary, it is an indication that something is wrong with the whistleblower scheme or that the employees don't believe that the cases will be handled appropriately.

And that's really bad news for everybody.

A good whistleblower scheme can, after all, be an asset to both your company and your employees. Let's have a closer look at why.

Internally, a well-functioning whistleblower scheme is a strong signal to the employees that the company takes the employees' concerns seriously and values transparency and responsibility.

And this may contribute to establishing a culture of trust, where the employees feel safe when calling attention to problems and irregularities.

But, a whistleblower scheme that your employees know how to use and have confidence in is not only an advantage to the employees. It is also an advantage to your company - not only because you risk being fined if you don't comply with the legislation in this area.

A well-functioning whistleblower scheme is important to your company for two general reasons. Firstly, it may help identify and improve some of the weaknesses in the company's processes, procedures, or behaviour that created the problem.

A well-functioning whistleblower scheme will create a stronger internal control mechanism in the company. When the employees feel safe when reporting irregularities, you get insight into some of the weaknesses that could potentially be used to commit illegal acts.

And this brings us to the second reason: Getting insight into the problems rather early enables you to act proactively to the problems before they escalate and cause major damage.

It also helps maintain the customers' and investors' confidence - as well as that of the general public. We have seen repeated examples of cases that got out of hand in the media and caused major damage to both individuals and the company's reputation. Many of these cases could have been mitigated - or perhaps even avoided - if the company had had an internal control mechanism and had reacted early in the process.

But what should your company attach importance to when choosing the design of your whistleblower scheme?

Email arrangements, physical mailboxes, and invitations for the employees to take personal contact may seem to be solutions that it would be easy to both implement and use. But they aren't sufficient - neither regarding GDPR issues nor when it comes to securing the reporter adequate confidentiality during the handling of the case.

Therefore, we recommend that your company chooses a software solution for your whistleblower scheme. Developments in legal tech are rapid, and several companies have specialised in whistleblower software production.

If you choose to subscribe to a software solution, you also ensure that your whistleblower scheme is updated at any time when it comes to complying with the rules and regulations in force in this area at any time.

Once you have chosen a software solution, it may also be an advantage to consider having an external third party manage your whistleblower scheme. Thus, you ensure that the reports are handled as objectively as possible and by a person who doesn't have a personal relation with either the company or the employees involved.

It could also be an advantage to consider already now how to create as much awareness as possible about the scheme in the company. For example, by advising the employees and directors about what could be a legitimate report, understanding the reporting process and informing about their right to, for example, confidentiality and protection against reprisals.

If considerations of this nature are incorporated in the decision-making process, you will increase the probability that your whistleblower scheme will be used in a way that would be advantageous to both the company and the employees.