As member states rush to enact whistleblower laws in accordance with recent EU regulations, one group is facing a hidden disparate impact – SMEs are paying high subscription costs for digital whistleblower hotlines.
Trisha Cole (written in English, machine translated)
What's Behind The Recent EU Whistleblower Laws?
As compliance professionals, we are convinced of the need for whistleblower protection laws. Apart from what we’ve seen and heard in our own professional experience, we were as shocked as the general public when scandals such as Wirecard and Duke University came to light. Without whistleblowers willing to step forward, who knows how long these schemes would have remained undetected?
In order to combat similar frauds and corporate cover-ups, the European Union and several member countries have begun enacting legislation aimed at supporting whistleblowers. Organizations with more than 50 employees, and municipalities greater than 10,000 residents, are required to establish internal whistleblowing channels according to statutory requirements. Read more details about the legislation in our blog here.
Behind these laws is an assumption that clear reporting procedures and safeguards make it easier for whistleblowers to come forward. If more whistleblowers are willing to come forward, then more criminal or negligent activity can be halted, so the reasoning goes. In our experience, there are a number of factors which prevent whistleblowers from coming forward. Some relate to lack of clear reporting procedures, but others stem from social or professional elements which are not easily addressed by legislation. Peer pressure and/or fear of retribution are two such examples.
Thus while these laws will hopefully encourage more (and earlier) reporting, they are not the magic cure for corruption that many wish them to be. Illegal activity, unfortunately, still has ample opportunity to thrive. Keeping this in mind, we turn to consider the additional impacts of the EU Whistleblower Directive. One group in particular faces a new burden as they implement the required whistleblowing procedures at their own expense.
Unintended Cost of Whistleblower Laws:
Compared to traditional solutions, whistleblowing software is Google Maps verses a fold-out atlas. Digital platforms are intelligent and make case-management significantly easier. The entire process can be managed through one portal, which allows for the whistleblower to maintain anonymity and to report from anywhere in the world.
These features make digital whistleblowing platforms more efficient and pleasant to use than traditional whistleblowing methods. This is true for both the reporting person and the organisation. As Trusty is an online whistleblowing portal, our belief in the value of these systems is apparent.
However, the downside of digital whistleblowing platforms is that most of them are expensive. Large organisations can pay thousands of euros per month to integrate software into their secure network. The larger the organisation, the greater the number of reports and responders involved. Despite these high costs, even the largest organisations can expect annually around 10 reports per thousand employees. That’s quite a high cost per report!
Small-to-medium organisations, on the other hand, might not receive any whistleblower reports at all. Despite this, some whistleblowing software companies charge SMEs 300€+ for a monthly software subscription. For a business with 250 employees, that’s more than 1€ per employee, per month. For software that they will rarely use, because they are not engaged in wrong-doing anyway.
As legal and compliance professionals, this didn’t sit well with us. Why should companies pay for software they will rarely use? Particularly when refraining from reportable activity is behaviour we want to reward? Until Trusty, SMEs were faced with the choice of either losing thousands of euros annually from their departments or make do with a free but risky tool like email.
Trusty Free Whistleblowing Platform
Whistleblowing is a public service and every possible protection should be granted to whistleblowers. But we must take care that this protection doesn’t cause indirect harm to organisations who haven’t committed any wrong-doing.
That’s why we’ve made Trusty as a free whistleblowing platform, available to any organisation regardless of size. Trusty is compliant and secure, with features useful for both the reporting person and the organisation. Within the web portal, the reporting person can maintain anonymity if desired, plus they don’t need to be logged in to the company intranet in order to report wrongdoings. Organisations can see and respond to reports in one convenient platform, also accessible from anywhere. Notifications make sure that your company won’t be fined for missing response deadlines.
Our Trusty Free plan includes unlimited storage and two user accounts, which is more than enough to handle the caseload for an SME. Our Trusty+ package is 49€ monthly and offers features to suit larger organisations with multiple countries of operation.
Why did we make Trusty free when other software companies went in for a gold rush?
First, we found a clever way to offer whistleblowing software at a fraction of the cost. The Trusty web portal is hosted on a secure 3rd-party server in Germany, blending cutting-edge cyber security with sensible cost-efficiency.
Second, and most motivating, is that we want this essential public service to be accessible and convenient for every organisation. We want to encourage compliance, not hinder it!
If your organisation is already paying for whistleblowing software, we will gladly help you switch! Trusty is unbelievably easy to set up – simply copy and paste the link on your website, that’s it!