• Professional News
  • 22 July 2013

Tips on whistleblowing programmes

In recent weeks, whistleblowing has been high on the agenda following former CIA agent Edward Snowden’s disclosure of USA’s comprehensive surveillance of ordinary citizens throughout the world.  Such disclosures have naturally prompted renewed debate on the advantages and disadvantages of a Big Brother society.

Whereas few people like the idea of their doings being registered, a whistleblower scheme at the workplace may be a proper and efficient tool for confidential reporting of serious offences or suspicion of such offences.

In recent years, a growing number of Danish businesses have established whistleblower schemes in order to create, for example, employee confidence and minimise the risk of unlawful activities and bad publicity.

Several important issues must be taken into consideration when a whistleblower scheme is to be established, but as a general rule the following should be considered:

  1. What is the scheme to include?
    A whistleblower scheme should only include serious offences, such as environmental pollution, serious breaches of industrial safety, unfair competition, illegal bookkeeping, theft, embezzlement, bribery, violent conduct or threats against employees.­ Less serious offences, such as difficulties in cooperation, should be reported through the ordinary channels, such as to the immediate superior or to HR.
  2. Who will be covered by the scheme?
    Employees, management and external business partners may in principle report offences and may be subjected to such reporting.­ This is for the individual business to decide.
  3. Should the scheme be outsourced to an external business partner?
    Confidence in the system may be increased by an independent third party handling the reportings. This will avoid situations in which reportings are handled by the person reported for misconduct and in which the case handler gives preferential treatment to the persons reported for misconduct. ­
  4. What should be the consequences of offences?
    The whistleblower scheme must support the business' staff policies, "code of conduct" and other guidelines to be observed by employees and business partners. It is important that the consequences of offences are clearly defined.
  5. How to inform employees about the scheme?
    It is important that businesses introducing a whistleblower scheme inform their employees of the purpose of such scheme. The scheme is to serve as protection for all and must not give rise to any insecurity or other doubts. Therefore, it is a good idea to consult the works council of the relevant business.
  6. What if the business engages in international operations?
    Several Danish businesses are subject to the American Sarbanes-Oxley Act 2002 ("SOX") laying down specific requirements in respect of the establishment of a whistleblower scheme.­­ As at 1 July 2011, the United Kingdom introduced the Bribery Act 2010, which not only applies to businesses having their registered offices in the United Kingdom, but also foreign businesses connected to the United Kingdom.­ The foreign businesses included must ensure that the internal business procedures and policies suffice to protect against bribery, for example by introducing a whistleblower scheme.

Corporate governance code
In Denmark, there is no legal requirement that businesses establish a whistleblower scheme. However, the Committee on Corporate Governance in Denmark recommends in its "Recommendations for Corporate Governance" that the supreme governing body of a business decides whether a whistleblower scheme is to be established with a view to facilitate appropriate and confidential reporting of serious offences or suspicion of such offences.­ In addition, the new EU Capital Requirement Directive (CRD IV) requires several financial undertakings, such as banks, savings banks as well as investment associations to make it possible for employees to anonymously report offences to the supervisory authorities.

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