What Is Whistleblowing and Why Do You Need a Whistleblowing Solution

By Editorial Team | September 4, 2024

Whether it’s to help protect business reputation, prevent serious harm, or build a loyal workforce, whistleblowing has significant benefits for any business and could be integral to success. That said, it’s crucial you implement a successful whistleblowing solution in your company. However, with what can often seem like ever-changing laws and regulations that vary from country to country, understanding what is whistleblowing and how it works can be challenging. Therefore, in this article, we’ll tell you precisely what whistleblowing ia, the laws surrounding it, and why you need a reliable whistleblowing solution.

What Is Whistleblowing?

Whistleblowing in the workplace is when an individual informs management or an official third party about malpractice or irregularities. This person is usually an employee but can also be a third party, such as a customer or supplier. This primarily aims to highlight serious workplace misconduct, a law violation, or a severe issue that could affect the general public. Often referred to as ‘blowing the whistle,’ it’s vital organisations have a whistleblowing policy in place to ensure individuals can raise concerns without fearing repercussions.
Upon receiving a report of wrongdoing, a confidential investigation should begin.

What Can Be Considered Whistleblowing?

Companies and employees need to know what types of complaints are considered whistleblowing to understand the term entirely. Generally, the most common types of whistleblowing complaints involve the endangerment of someone’s health and safety, risk or actual damage to the environment, a miscarriage of justice, or criminal offences, such as fraud.

However, a broader spectrum of issues also falls under whistleblowing. This includes:

Unlawful acts
Unethical behaviour
Violation of company policy
The covering up of wrongdoing

Why Is Whistleblowing Important?

There are numerous reasons why whistleblowing is important and should be encouraged. Firstly, whistleblowing is a very effective way to prevent organisational wrongdoing. The information provided by whistleblowers tends to lead to the discovery of malpractice or the apprehension of people involved in misconduct or fraud. Secondly, whistleblowing can protect a business’s reputation because concerns and risks can be raised before they become public knowledge. Finally, transparency and accountability allow companies to function effectively with a workforce that feels safe and supported.

Other ways in which whistleblowing can help a company include:

Reduction in the risk of legal action
Reduced corruption
Reduced losses
An empowered workforce
Increased job satisfaction

What Does The Law Say Regarding Whistleblowing?

Implementing a reliable whistleblowing solution in your company isn’t only necessary for the success of your business, it’s also crucial for staying in line with the law. In 2019, the EU Whistleblowing Directive was introduced.The main goals of this Directive are to detect and prevent misconduct and breaches of laws and regulations, protect whistleblowers by ensuring anonymity, and improve law enforcement by establishing effective and confidential reporting channels. Furthermore, in 2023, the German Whistleblower Protection Act was introduced to further protect whistleblowers.

Under these directives, companies and public institutions with 50 or more employees must set up an internal reporting channel. Whistleblowers must also be protected from reprisals, and all personal data must be handled in accordance with GDPR.
Companies must also confirm receipt of a whistleblowing report within seven days. The whistleblower must then be informed of any action taken within three months and informed of the outcome.

Why Do You Need a Whistleblowing Solution?

One of the main reasons companies require a whistleblowing solution is that many employees don’t feel safe enough to report their concerns. According to a 2022 World Whistleblowing Report, 80% of employees fear legal action if they raise wrongdoing within a company.

You also need a whistleblowing solution because the consequences for a business that doesn’t have one can be catastrophic. Not only will you potentially break European Law, but you might also damage your business’ reputation.

If an accusation of misconduct becomes public before you’ve dealt with it, the reputational damage could result in significant losses. By providing your workforce with a whistleblower solution, your business will have the tools to handle misconduct properly and ensure your employees feel safe.

Internal Reporting Channels

As the EU Whistleblowing Directive laid out, companies with 50 or more employees must set up an internal reporting channel. This is one of the most common whistleblowing solutions to implement.
Through internal reporting channels, employees can raise instances of misconduct or malpractice internally with their management. Internal reporting can take the form of emails or face-to-face meetings with the employee.
The main aim of this whistleblowing solution is for companies to receive reports of wrongdoing, easily follow up on them, and keep the whistleblower informed. When received, reports are usually escalated to a company’s legal team or HR Department for investigation and action.

The downside of internal reporting channels, is that employees often mistrust the system and fear retribution for reporting illegal behaviour.

External Reporting Channels

Companies often set up external whistleblowing solutions to guarantee they follow the correct procedures or because they’ve been caught out in the past. An external reporting channel is when information regarding suspected wrongdoing is reported externally to a proper authority rather than internally.

An external reporting channel will receive reports, follow up with the whistleblower, and provide feedback on reports of misconduct in specific areas. External reporting allows employees to report directly to an external authority without going to their management.
Many employees prefer this because it eliminates awkwardness and the fear of reprisal.

Why You Should Use an External Whistleblowing Solution in 2024?

In 2024, we at DIESEC recommend using our whistleblowing solution. A solution provided by a trusted external authority has many advantages that will make things easier for you. For example, a reliable external reporting system can ensure your company complies with the appropriate whistleblowing laws and regulations while also complying with privacy laws.

An external solution will also provide a safe, secure, and reliable IT solution specifically designed to handle reports and investigations and provide a solution. This will help your company protect employee data and manage complaints quickly and effectively.
Another reason to use an external solution is to ensure employees feel more comfortable reporting wrongdoings.

Posted in DIESEC™