5 benefits of whistleblowing in the workplace 

Whistleblowers play a key role in our society by putting the spotlight on wrongdoings of companies and authorities. Whistleblowers are also a great asset to their organisation. By resolving problems internally before they reach the media, the organisation will avoid rumours and negative publicity. In this article, we will look at the following five major benefits of whistleblowing in the workplace: 

• Acknowledge misconduct at an early stage 
• Avoid damaging your reputation 
• Reduce financial loss 
• Build trust 
• Ensure legal compliance 

Whistleblowing against fraud 

Whistleblowing is a very effective tool to combat fraud. The 2020 Association of Certified Fraud Examiners “Report to the Nations” found that a whopping 43% of all corporate fraud was detected thanks to a tip, and half of those tips came from an employee. The report also showed that companies with an anonymous whistleblowing function consistently have lower financial losses than other companies. 

Access to information that is otherwise rarely available can help company management to minimise a wide range of risks. Whistleblowing also has a preventive function. Awareness of the whistleblowing function might make people think twice about doing something inappropriate. 

Reporting systems can help close the communication gap 

Professor Wim Vandekerckhove of the University of Greenwich in London, researches the institutional aspects of whistleblowing. He is also the convenor of the ISO group working on new standards for whistleblowing systems. Prof. Vandekerckhove points out the big gap between what is happening in a company’s operations, and what the top management has knowledge about.  

The communication gap can range from ethics and general dissatisfaction to violations and problematic behaviour. A reporting system can increase transparency and help bridge such gaps. It is also common that problems are stranded with middle management. This might be due to lack of time or because mid-level managers don’t know how to handle the problem. A thoroughly implemented whistleblowing system can certainly compensate for these shortcomings – provided that senior management is willing to listen. 

Anonymous whistleblowing might prove crucial 

Potential whistleblowers often fear retaliation and therefore choose to remain silent about suspected wrongdoing. A whistleblowing channel offering anonymous two-way communication will give courage to speak up. Thus increasing chances that the organisation’s managers and executives will receive important information and be able to act in time. 

Five benefits of whistleblowing in the workplace: 

1. Detect misconduct at an early stage with opportunity to intervene and remedy the problems. The very existence of a whistleblowing system can deter illegal or inappropriate activities. Encouraging people to speak up reduces the incidence of fraud, corruption and unethical behaviour. Early intervention will also help deal with the problem directly, without having to escalate it and cause more damage.  
   
   

2. Avoid damage to the company’s reputation by handling reports internally in a correct and discreet way. If there is no response to internal anonymous tips, the whistleblower can choose an external reporting channel or turn to the media, and still be protected by the law. 
   
   

3. Mitigate financial losses by addressing the problem directly and prevent it from reoccurring in the future. Organisations without a whistleblowing function have significantly higher losses than companies who implemented reporting channels. In ACFE’s 2020 Report to the Nations, companies and organisations lost up to 5% of their annual turnover due to fraud. 
   
   

4. Build trust. Whistleblowing is not only about being able to act on misconduct. Today, it also shows that the company has high ethical standards, which in turn builds trust with customers and partners. A company actively encouraging and supporting its employees to report misconduct is perceived as trustworthy. An open and honest work culture will create better working conditions and thus higher productivity. Loyal employees are also more likely to raise the alarm internally instead of turning to external reporting channels. 
   
   

5. Ensure legal compliance. Currently, we have a global trend towards stricter anti-corruption and personal data management laws. GDPR, the EU’s General Data Protection Regulation, is the most conclusive legislation of its kind in the world. A properly implemented and executed whistleblowing function that fulfils all the requirements will reduce risks related to compliance.  

Interested in Whistlelink? Visit our Product and Checklist pages to learn more about the Whistleblower Law, the benefits of whistleblowing, and how Whistlelink can help you get compliant. 

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