Whistleblowing also has significant societal benefits, protects the public interest, and has prevented a number of unpleasant situations in recent years. Let's take a look at the top five reasons why it's worth your while to implement a whistleblowing system.
Unless employees have a tool that allows them to easily, safely, and anonymously raise concerns about unfair or illegal conduct, they will usually keep quiet about such issues or go public with the information, no matter how serious. While financial losses can be made up, damage to a company's reputation can be irreversible. And yet, most problems can be easily resolved through a reporting channel, meaning that management becomes aware of it in good time. A whistleblowing platform helps prevent a media storm and poor reviews on a company review portal.
According to research by NAVEX Global, companies lose an average of 5% of their revenue due to internal fraud. A properly implemented whistleblowing platform will uncover 3x more fraud than much more costly internal audits and is one of the most effective tools for detecting unfair practice.
The benefit of a whistleblowing system is that you can learn of problems ahead of time, so that you can resolve them without paying out huge sums and avoid further financial damages. In addition, the very introduction of a whistleblowing system acts as a preventive measure. The fact that there is such a system in place in a company can deter some people from acting illegally or unfairly in the first place.
Most people who decide to change jobs have a compelling reason to do so. Surprisingly, the most common reason is not the amount of financial compensation, but dissatisfaction with the atmosphere in the workplace. Whether it's the attitude of management, relationships between colleagues or other related issues, detecting them early can prevent employees from leaving. If you have a well-established whistleblowing platform, you send a strong signal that you care about employee satisfaction. They can raise their concerns with a view to having them alleviated before they decide definitively to leave their role.
In many countries, a properly implemented and functioning whistleblowing system helps a company to satisfy the conditions necessary to escape corporate criminal liability. Moreover, with an effective whistleblowing system, a company can obtain a range of certifications, from ISO to CSR, and it also increases its credibility in the eyes of stakeholders and international business partners.
The European Whistleblowing Directive came into force on 17 December 2021 and as such, EU companies with more than 50 employees must do the following:
It should also be taken into account that a whistleblowing platform cannot be implemented overnight. It will take time to establish a functional and credible whistleblowing platform, train staff, and ensure that there is sufficient awareness of its existence.
Whistleblowing - just a bureaucracy or an opportunity for your company?