What is a whistleblower system?

A whistleblower system is a structure that allows employees, business partners or external persons to report misconduct, legal violations or internal rule violations confidentially or anonymously.

A whistleblower system is managed by a so-called internal reporting office. 

An internal reporting office can be set up in various ways. The decision on which option to choose depends on the size, structure and general conditions of a company.

• Ombudsperson(s) for face-to-face meetings
• Letterbox or email inbox for text messages
• Telephone hotline for information provided verbally
• Video conferencing tool for virtual meetings
• Digital whistleblower system

According to the German Whistleblower Protection Act, companies with at least 50 employees must set up a reporting system. Some companies are required to do so even if they have fewer employees, for example, investment firms or credit institutions.

The aim of the EU Whistleblower Directive, which every EU country is required to implement in a similar manner, is to protect whistleblowers from possible discrimination. The German Whistleblower Protection Act, for example, regulates the procedures of internal reporting offices, the confidentiality of whistleblowers and the scope of application.

Even if it sounds like a tiresome obligation for companies, a whistleblower system makes it possible to uncover any malpractice at an early stage and possibly avoid fines or other negative consequences. 

The Whistleblower Protection Act applies to criminal offences, administrative offences and violations of regulations. However, it is always a prerequisite that the violations have occurred in a professional context. 

Ideally, a whistleblower system works something like this:

1. A person observes or learns of a wrongdoing and wants the company to remedy the problem.
2. The person is familiar with their company's whistleblower system and submits a report there.
3. This report is received by the reporting office.
4. The reporting office then investigates the case.
5. The reporting office then informs the responsible persons in the company – usually the management – about the misconduct and makes recommendations for further action. It also informs the person who submitted the report about the progress of the case

When setting up a whistleblowing platform, there are a few things to consider in advance, such as

• Who is suitable for managing a reporting centre?
• Should anonymous reports be possible?
• What type of reporting centre is right for my company?

If you are planning a digital reporting platform, we recommend our WhiteSparrow whistleblower system. We take care of the hosting and technical setup, and you take care of the support. If necessary, we are also happy to assist and advise you on legal matters.