What is a whistleblower system?

A whistleblower system not only protects companies and organizations from economic damage and loss of reputation, but also preserves the anonymity of whistleblowers.

Below you will find further insights into how whistleblower systems work, their benefits and more information.

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Employees, suppliers and customers of companies are given the opportunity via a whistleblowing system to provide the company with information about violations of applicable laws and company guidelines.
Such reports may relate to violations of labor, data protection, money laundering, tax or public procurement law, or of a company code of conduct.
code of conduct of the company.

Who needs a whistleblower system?

On October 23, 2019, the European legislature adopted Directive 2019/1937 on the protection of persons who report infringements of Union law (the “Directive”). It is also sometimes referred to as the “Whistleblower” or “Whistleblower” Directive. The Directive makes the implementation of a digital whistleblower system mandatory, particularly for companies with 50 or more employees. Regardless of the number of employees, there is an obligation to install a whistleblower system for various legal entities in the field of financial services, among others. The 27 European member states are now obliged to transpose this directive into national law by December 17, 2021.

 

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Separate from the legal obligation, a digital whistleblower system can also protect a company from profound material damage and lasting damage to its image if, after a report is made, effective measures are initiated by the company to limit the occurrence of damage or prevent impending violations.
Through a whistleblower system, employees, customers and suppliers can be encouraged – via the digital whistleblower system – to first turn to an impartial and trusted person within the company, such as a compliance officer, with their report instead of directly informing the public, the media or authorities. In addition, according to case law, the implementation of an effective and functioning compliance management system (CMS) can, under certain conditions, also have a mitigating effect on liability and punishment for responsible persons in the company.

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How a digital whistleblower system works

In contrast to analog reporting channels, a digital whistleblowing system can be integrated into an existing CMS structure. The whistleblower system provides stakeholders of a company with a central and first point of contact for submitting reports. Whistleblowers enter important information about the incident via the system’s case mask. The whistleblower is free to choose whether or not to provide personal data. If he does not do so, anonymity can thus be maintained. Even in this case, the whistleblower and the person handling the case can continue to communicate with each other via the Hintbox, as login data to a Postbox is generated when the whistleblower submits the report, which ensures anonymous communication.

 

Once the case has been received by a company’s compliance manager, it is usually checked for plausibility. Subsequently, follow-up measures are taken to process the case properly. In the best case scenario, a digital whistleblowing system supports both the whistleblower and the person handling the case.

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Requirements for a whistleblowing system

To ensure that whistleblowing systems effectively protect whistleblowers and companies, a number of technical, legal and organizational requirements must be met:

Reports submitted via whistleblower systems often contain sensitive information. For this reason, compliance with data protection law, namely the DSGVO and the BDSG, is elementary for the implementation of whistleblowing systems. The requirements of the data protection supervisory authorities must also be observed in this context. The implementation of data subject rights, documentation requirements, legality principles, and technical and organizational measures are essential components of a proper digital whistleblower system.

 

 

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The protection of whistleblowers against reprisals is one of the essential points of the Whistleblower Directive. For this reason, confidential processing of the identity of the whistleblower and third parties is fundamental.

Once a report has been received via the digital whistleblower system, it must be processed properly. The Whistleblower Directive refers to this as “follow-up measures”. For this reason, the whistleblower system should also play a supporting role here. With the help of predefined processing and process steps that apply generally in the company, the processor can be provided with important information on how to process the case in compliance with the directive.

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Advantages of a digital whistleblower system

The EU Whistleblower Directive requires companies and legal entities under public law to implement internal reporting channels. In addition to digital whistleblower systems, there are other channels that can be provided for submitting reports. These include submission by letter, by e-mail, by telephone or directly to the compliance manager in a personal meeting.

However, all of these methods have significant disadvantages compared to a digital whistleblower system. First, the anonymity of the whistleblowers is not optimally given. Furthermore, these channels cannot support compliance managers in processing to the extent of a digital whistleblower system. This can lead to avoidable breaches of deadlines or data protection regulations. Reporting channels by letter, email, phone or face-to-face can also have a higher threshold for reporting, which can deter potential whistleblowers from reporting, even though the breach may be serious.

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You can find further information on the EU whistleblower directive in our blog
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Summarized

 

What is a digital whistleblowing system?

A whistleblower system allows stakeholders of a company to report an illegal incident as well as violations of laws and company policies anonymously or by providing personal data.

Who needs a whistleblower system?

In principle, a whistleblower system is recommended for all companies and organizations; in some cases, companies in certain industries are already required to implement a whistleblower system. With the new EU Whistleblower Directive, this will also become an obligation for companies with 50 or more employees in the future. By the end of 2021, national legislators are to convert this directive into national law.

How a digital whistleblower system works

Incidents relating to a company can be reported via a whistleblower system. These cases are then processed internally and appropriate follow-up measures are taken if necessary.

Requirements for a whistleblowing system

A whistleblower system protects whistleblowers from reprisals and companies from economic damage and its reputation. All legal and technical requirements (including the Whistleblower Directive, DSGVO, data security) must be implemented by a whistleblower system.

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