Compliance training: Establishing the whistleblower system in the company

The Building Blocks of a Successful Introduction of Whistleblower Systems in Companies

The essential elements of the compliance strategy are the company’s own compliance culture and the “Tone from the Top”. The “Tone from the Top” means that all employees, from the executive floor to the newly started trainees, share the view that compliance with law, regulations, and internal rules is a matter of course and violations do not fit into the corporate culture.

This can be combined in the second step with the recently introduced Whistleblower Protection Act (HinSchG). This includes both information on the substantive and personal scope of application as well as explanations on the specific reporting procedure. The following questions should be clarified in a training session:

What does whistleblower protection mean?
Who is allowed to make reports?
What can I report about?
Who will process the report afterwards?
When will I get feedback on my report?
Can I make a report even if I only suspect a violation?

The focus of the topic should also be on the importance of whistleblowing in general, as well as the responsibility of employees to report violations. A focus lies on the identification of reportable offenses. Particularly violations in the areas of corruption, fraud, and discrimination, violations of environmental regulations, or violations of ethical standards should be recognized by employees. Employees should also learn in the trainings which information is necessary for a coherent report. This includes the well-known W-questions: What, When, Where, How, Who and Why?

What reporting channels are available?

Whistleblowers can freely choose whether they want to submit their report through the internal reporting channel or through an external reporting office. The staff must also be informed about this. Although the report should be made to an internal reporting office in cases where the violation can be effectively addressed internally and no reprisals are to be feared, it is of course free for the whistleblower to turn to an external reporting office if the violation reported internally has not been rectified. It is legally forbidden to obstruct or attempt to obstruct reports or the communication following a report between the whistleblower and the reporting office.

Employers are therefore called upon to create incentives for whistleblowers to first turn to an internal reporting office. Only in this way is it possible to clarify grievances initially within the company. For this purpose, employers must provide clear and easily accessible information about the use of the internal reporting procedure.

How are the reporting channels used?

The trainings should also inform about internal reporting channels, e.g. via software solutions, commissioned ombudspersons or whistleblowing hotlines. It should be explained how to best use the individual reporting channels. As part of so-called IT-supported whistleblower systems, it is possible for whistleblowers, for example, to submit their report in writing, orally and, if necessary, anonymously.

It should be made clear that the reports are treated confidentially and which mechanisms ensure this confidentiality. The trainings should also explain how the company ensures that the identity of the whistleblower is protected.

The next step is to inform the workforce about the procedure. This includes explaining deadlines and procedures within the reporting process. For example, the whistleblower receives a confirmation of receipt after seven days and must be informed about the progress of the procedure at the latest after a further three months.

How are whistleblowers protected from reprisals?

The aim of the new HinSchG is to protect whistleblowers from potential reprisals when they report grievances in their company. In the trainings, employees should therefore be informed about the legal protection measures that the Whistleblower Protection Act provides. Make it clear that reports are taken seriously and thoroughly investigated.

It should also be conveyed that reprisals against whistleblowers will not be tolerated and that there are mechanisms to report and investigate such cases.
According to the law, reprisals are actions or omissions in connection with professional activity as a response to a report or disclosure that cause or can cause unjustified disadvantage to the whistleblower. These include, among other things, termination and warnings of employment relationships but also the denial of participation in further training measures.

It should also be explained that only whistleblowers who had sufficient reason to believe that the information they reported was true are protected from reprisals. This means that whistleblowers are obliged to make reports only to the best of their knowledge and belief. Specifically, this means that if a report is knowingly false, the whistleblower protection no longer applies. In fact, in these cases, claims for damages can even be made.

Excursus: SMEs and Young Companies

SMEs and young companies usually do not have specific control structures to draw attention to grievances, as these are simply not legally required for many companies.

For these companies, a bottom-up approach to control is particularly rewarding. With this approach, you rely on the help of your employees. If your employees notice misconduct by colleagues, suppliers or business partners, they report this via an anonymous reporting office directly to the right contacts in the company. In uncovering violations or crimes, the employees play an important role. Within the framework of a healthy corporate culture in which values such as collegiality are respected and lived, the anonymous whistleblower system is free of denunciation for the employees and serves the company for its survival and growth. The workforce must be informed about this.

How often should compliance trainings be carried out?

Compliance trainings in this area are an integral part of a modern compliance management system and should therefore be conducted regularly to maintain awareness of the Whistleblower Protection Act and inform employees about changes or updates.

With eagle lsp as operator of your reporting office, you create additional trust through guaranteed anonymity and absolutely independent processing of reports. The intelligent outsourcing of the reporting office to the compliance and legal experts of eagle lsp does not result in any additional effort for the corporate responsible persons.

If employees detect and report violations, the corporate responsible persons have the opportunity to rectify misconduct. The consistent sanctioning of violations in turn contributes to ensuring compliance. This way, you save the resources for operating complex governance functions that are neither appropriate nor necessary for the size of your company.

Checklist for the successful implementation of compliance in your company

Inform the defined target group about the establishment of the reporting office.
Integrate the reporting office into your corporate culture and your corporate mission statement.
Define what behaviors correspond to the ecological, social, and ethical values of your company.
Adapt the communication channels and media to the target groups.
Inform internal interfaces such as legal department, auditing, press office, data protection, IT security, product safety, occupational safety, HR, etc. separately and coordinate common processes. In case of indications of serious violations, the further procedure can be quickly coordinated with all stakeholders.

You have not yet implemented an internal reporting office? Then we should talk!

Date: 08.06.2023