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Whistleblower Protection in Finance Industry: A Wake-Up Call for Swiss Companies
The European Union’s Whistleblowing Directive, which came into effect in December 2019, has set a precedent for whistleblower protection. EU member states were required to transpose the directive into their national law by December 2021. However, Switzerland remains without an equivalent legal framework, leaving companies vulnerable and uncertain about how to handle whistleblowers.
EU’s Whistleblowing Directive: A New Standard
EU subsidiaries of Swiss groups are affected by the directive, particularly those with over 50 employees. They must establish internal reporting channels, which includes meeting minimum content requirements. Meanwhile, Swiss companies operating in the financial sector need to implement reporting channels regardless of employee numbers.
Why Should Swiss Companies Take Action?
While the EU directive does not directly apply to Swiss companies within their own borders, they would be well-advised to develop and implement an appropriate whistleblowing management system. This is crucial for promoting an ethical culture, demonstrating good corporate governance, and strengthening trust with stakeholders.
How to Establish a Trustworthy Whistleblowing Management System
To establish a trustworthy whistleblowing management system, companies should:
- Set up an infrastructure tailored to their needs
- Implement and promote a clear policy on reporting and investigation processes
- Conduct adequate training and foster a speak-up culture
- Designate a reporting office that handles reports independently and confidentially
- Appoint an independent investigative function
- Maintain a regular reporting cycle
Why is Whistleblower Protection Important?
Philipp Rosenauer, partner at PwC Switzerland, emphasizes the importance of whistleblower protection: “Whistleblowers play a vital role in uncovering misconduct and contributing to an open and transparent society. It is crucial that companies take steps to protect them from negative consequences.”
Richard Thomas, partner at Risk Consulting TIS (Trade, Industry, Services) & Internal Audit, PwC Switzerland, adds: “The EU directive sets a high standard for whistleblower protection. Swiss companies operating in the financial sector should consider implementing similar measures to demonstrate good corporate governance and strengthen trust with stakeholders.”
Get Support from PwC Switzerland
PwC Switzerland is happy to support companies in understanding the impact of the EU Whistleblowing Directive on their business and developing or enhancing an appropriate whistleblowing management system. Contact us today to learn more.