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Four benefits of whistleblowing for organisations

Contrary to what employers and managers might believe, integrating a whistleblowing solution can be an excellent decision for businesses. After all, being notified of wrongdoings early on in the process can help address them ahead of time, well before they turn into full-blown PR and financial nightmares with career-ending implications. Read on to find out exactly how your organisation could benefit.

1. Less Negative Press

Findings from a recent survey on whistleblowing in Europe showed that employing the right whistleblowing solution can result in 46% negative news stories. Whistleblowing scandals that get to the press usually do not bode well for the organisation’s public image nor their profit margins. Damage control costs can quickly add up in the form of remedies for affected employees, government fines, settlements, etc. Re-branding and recovery from public scandals is also not going to come cheap in both terms of human and financial resources. Furthermore, in most cases where whistleblowers have gone to the press, they tend to report misconduct within the organisation first. This means that the company had the chance to address the concerns ahead of time and often there are several such missed opportunities.

2. More profit

The report also suggests that an adequate whistleblowing solution can yield a 2.8% increase in return on assets. Many still believe that more whistleblowing reports are bad for business, however that is not actually the case. Early risk management pays off in this respect, since organisations will be made aware of problem areas within their company culture. Whistleblowers and those who ignore their complaints both have the same goal in mind - to help the organisation they work for. However, the latter tends to incur severe consequences. The people who benefit from discouraging whistleblowers are those committing misconduct.

3. Fewer Lawsuits

The third benefit concerns the number of material lawsuits a company has to deal with. Organisations that have integrated whistleblowing into their company culture successfully seem to get sued less. Specifically, the results show that businesses that received more reports saw 6.9% fewer lawsuits. Under the 2019 legislation from the European Union organisations will incur penalties on not addressing complaints in time as well as for retaliating against whistleblowers. This is a positive development ensuring that problem areas will not go unnoticed until it is too late.

4. Fewer Settlements

The survey results put forth another benefit, namely a reduction in settlements. This is likely due to the increased volume of internal whistleblowing which allowed the organisations to get ahead of issues and thus reduce settlements by 20.4%. Internal reporting in particular allows organisations to address issues early and avoid them snowballing. As mentioned above, whistleblowers often report internally to the organisation first and taking this as a positive aspect to a company culture goes a long way in managing risk by avoiding legal troubles. Furthermore, organisations that report misconduct to relevant authorities themselves incur less penalties.

To sum up, organisations that have an adequate whistleblowing platform enjoy less negative press, increased profit margins, as well as fewer lawsuits and settlements. Taking whistleblowing seriously is a net positive for organisations small and large, not least due to the effect on profit margins. Talent retention and a good reputation are sure to improve the overall company culture resulting in a better environment for all, except those who wish to exploit it for their own gain.

Further reading:

NAVEX Global (2022) Whistleblowing in Europe, NAVEXGlobal report.