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A love letter to entrepreneurs - or: 10 points why whistleblower protection pays off.

Dear entrepreneurs, shareholders and other influencers in companies,

The Whistleblower Protection Act (HinSchG) is in force in Germany and in Austria as the HSchG. I understand your priorities, that the focus of your activities is on the core business and in the development of new business areas. And precisely because you have to deal with a multitude of additional requirements imposed on you by the legal side on a daily basis, your annoyance about another compliance requirement is clear to me. We only have to think of the recent case law on the recording of working hours in Germany.

However, there are weighty reasons why a whistleblower reporting office (Internal Reporting Office) and the corresponding software is beneficial for your company and why it will always pay off monetarily to be active in the field of whistleblowing. Legal obligations such as the EU Whistleblower Directive or the Whistleblower Protection Act (HinSchG) or the Whistleblower Protection Act (HSchG) in Austria notwithstanding. Here are 10 points that speak for the establishment of a whistleblower office:

  1. risk minimisation: a whistleblower reporting office or internal reporting office enables you to learn about possible violations of laws or internal company guidelines at an early stage. This helps you to take timely action and avoid possible reputational damage or financial loss.
  2. building trust: Establishing such a reporting office shows your employees that transparency and an open communication culture are important to you. This fosters trust among your workforce and can lead to higher employee satisfaction and retention. Competitive advantage: Companies that take compliance and ethical behaviour seriously are perceived as responsible and trustworthy by customers, partners and investors. This can give you an edge over the competition and contribute to the long-term success of your business.
  3. legal requirements: In many countries, companies above a certain size are required to set up a whistleblower reporting office. Meeting these requirements will help you avoid possible sanctions or penalties.
  4. increase efficiency: Whistleblower software makes it easier to set up and manage the whistleblowing unit and ensures that it runs efficiently and smoothly. This software can automatically generate reports, ensure anonymity and facilitate communication with whistleblowers.
  5. employee protection: A whistleblower reporting centre provides a protected space for your employees to report concerns or violations without fear of retaliation or retribution. This promotes an atmosphere of openness and honesty in your organisation.
  6. proactive problem solving: by identifying problems or misconduct early, you as a business owner can be proactive and resolve issues before they escalate or cause greater damage.
  7. better decision making: The information gathered through a whistleblower reporting centre can help you make informed decisions and optimise your company's internal processes and policies.
  8. meeting customer and stakeholder expectations: Customers and other stakeholders increasingly expect companies to act ethically and take responsibility for their actions. A whistleblower reporting office shows that you take these expectations seriously and actively strive to meet ethical standards.
  9. prevention of scandals: Scandals involving illegal or unethical behaviour can have serious consequences for a company. A whistleblower reporting centre can help prevent such scandals by providing a platform where potential violations can be identified and dealt with at an early stage. This reporting office also ensures that conscious false reporting or denunciation can be identified and prosecuted as such at an early stage.

Overall, establishing a whistleblower reporting office and using whistleblower software is an investment that will pay off for your company in the long run. It helps to minimise risk and build trust - both factors that are critical to the success and growth of your business. The range of benefits for your business is clear. These measures help to promote a positive corporate culture, reduce risks and ensure the long-term success of your company.

Of course, there are also staffing needs that come with setting up a whistleblower reporting centre. If you prefer to outsource these, please contact us. We are here for you. Write to us at or call us at +49 (0) 176 72224558.

Your Martin Meng and the confidal team