Whistleblowing: A Key Component in Preventing Corporate Crisis

In today’s business environment, corporate scandals and financial crises are becoming increasingly common. As a result, whistleblowing has emerged as a crucial component in preventing fraud and misconduct within organizations.

The Importance of Whistleblowing

According to Art. 321a Para. 1 of the Code of Obligations, employees have a duty to uphold the justified interests of their employer in good faith. However, this duty also extends to reporting misconduct internally before seeking external assistance from authorities or the public. If an organization fails to provide adequate means for reporting misconduct, employees may choose to report outside of the company, potentially leading to a major crisis.

The Board of Directors’ Responsibility

Swiss law and best practices expect the Board of Directors to take responsibility for the internal control system, dealing with risk and compliance. This includes ensuring that whistleblowing reports are taken seriously and dealt with swiftly, building trust with employees and encouraging them to come forward if they witness misconduct.

• The Board is also responsible for data protection matters and the correct implementation of the revised Data Protection Act.
• Failure to comply can result in criminal penalties.

A Comprehensive Ethics Program is Key

Having a whistleblowing hotline is not enough. Companies must also have a comprehensive ethics program and culture that empowers employees to speak up without fear of retaliation. In Switzerland, where fear of retaliation remains a real concern, it is essential to create an environment where employees feel safe reporting misconduct.

• According to the Ethics at Work: 2021 international survey of employees, only 41% of Swiss employees who have been aware of misconduct at work have spoken up about it with management or other appropriate individuals.
• This highlights the need for a robust whistleblowing system that is easy to use and provides adequate support for employees who report misconduct.

Deloitte’s Whistleblowing Solution

To assist organizations in handling whistleblowing caseloads, Deloitte has launched its whistleblowing solution, Deloitte Conduct Watch. This comprehensive platform helps organizations manage their whistleblowing risk by providing:

• A secure and confidential reporting system that encourages employees to speak up.
• Support for employees who report misconduct.

Conclusion

Whistleblowing is a critical component in preventing corporate crisis and promoting ethical behavior within organizations. By establishing a robust whistleblowing system that is easy to use and provides adequate support for employees who report misconduct, companies can build trust with their employees and prevent fraud and misconduct from occurring in the first place.

For more information on how to manage your whistleblowing risk, please contact Philipp Lüttmann or Arjan Hulsbos at Deloitte.