More than half of a company’s employees who witness unethical or illegal conduct hide it from their superiors. However, nearly 75% admit that they would share information regarding fraud with an external party such as the media, the police, or a lawyer.
As an example, this exactly what happened to Škoda Auto when in 2019 a severe case of workplace bullying came to light. The media heard of stories of regular employees locking their agency colleagues in crates and putting laxatives in their coffee.
In the best case scenario, unreported problems can result in a media scandal, in the worst case they end up in court.
A fundamental change in the area of whistleblowing in the EU is being brought about by EU directive EU 2019/1937 of the European Parliament and of the Council on the protection of persons who report breaches of Union law. In relation to the directive becoming law, all private companies with more than 50 employees must implement internal reporting channels for the reporting of inappropriate behavior or fraud by the 31st March 2022. The rules are quite strict - the whistleblower must be able to report their issue anonymously, their safety must be ensured, and the company must respond to the complaint within the designated time frame.
Very often we see the presence of the so-called ‘onlooker effect’. In such cases, the employee doesn’t report anything because they assume somebody else will. The onlooker effect is a paradoxical psychological phenomenon which shows that the more people present at a dangerous or hostile situation, the less likely someone is to intervene.
In 1960, psychologists Bibb Latané and Judith Rodin carried out an experiment. Columbia University students were invited to a room where they were to fill in a questionnaire in the presence of an assistant. After a while, the assistant announced that she would be right back and went into the next room. After four minutes, she played a recording of a fictional fall, where she moans that she has broken her ankle. The recording was set to play until one of the subjects came to help her or until a minute passed. How did it turn out?
The results of similar experiments show that people respond to emergency situations more slowly in the presence of others. No single person feels responsible for dealing with the crisis situation.
Besides the fact that people who report unethical activities in the workplace are often labelled snitches, they face the threat of retaliation on the part of colleagues or their superiors. People have to face the internal fear of rejection and also that of losing their job, ostracisation by their colleagues and other consequences.
The reluctance of employees to report unethical or fraudulent activities in their company is due, among other things, to the lack of a reporting system which would allow them to simply and safely report such behaviour. Telephone hotlines, emails and physical boxes are a thing of the past and, what’s more, they don’t guarantee 100% safety and anonymity which is key in such cases.
All of these barriers can be reduced through the introduction of a company reporting tool. The basis is transparent communication with employees. Those in management positions need to clearly explain why they are introducing a reporting system into the company, what they expect in relation to it, and, above all, how people should use it.
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