External whistleblowing software, solutions and services help ensure that organisations can effectively identify potential wrongdoing and, where appropriate, address misconduct, whilst fostering a culture of transparency and trust. In today’s corporate landscape, the importance of these whistleblowing systems cannot be overstated.
Here are the 12 key reasons why your organisation should consider setting up an external whistleblowing solution:
1) Wrongdoing has consequences
Businesses and organisations often need to set up an external whistleblowing solution because they’ve been caught out in the recent past.
By ‘caught out’ I mean they’ve just emerged from a reputation damaging incident or incidents, probably involving legal action, and possibly involving judicial fines or even criminal trials and sentences.
The actual wrongdoing in the workplace could have been anything – fraud, racism, sexism, corruption, insider trading – but it’s the consequences that really matter here.
These wrongdoing incidents really do cause damage to an organisation.
A private business might sustain such reputational damage that it impacts on profit, turnover and even their ability to recruit. A listed company might suffer a slump in share price and force directors and the board to resign. A charitable organisation might find its funding reviewed and cut or see its donations dwindling away to nothing.
In the worst possible cases, the business might go bankrupt or the organisation collapse.
That’s how bad it can get.
So, it’s no wonder these organisations want to prevent it from happening again. It’s no wonder they want to show they’re proactively making changes.
They want to be seen to be changing for the better.
They know that only by improving their whistleblowing policies and whistleblowing systems will they be able to mitigate any further damage to their reputation.
Implementing an external whistleblowing hotline helps these organisations in several ways.
Firstly, simply putting a tried-and-tested, reliable, whistleblowing system in place can be pointed to as taking a robust action to help prevent future wrongdoing.
It can be pointed to as concrete evidence of change.
Secondly, using an external whistleblowing supplier lends an air of independence to any whistleblowing process. Especially if that vendor allows anonymous and semi-anonymous reporting. Indeed, one of the main blockers to making an employee becoming a whistleblower is the fear of retaliation by colleagues.
By promoting the independence of a whistleblowing process an organisation can actually encourage more reports, potentially leading to recouping losses, providing earlier warning of wrongdoing or simply preventing it from happening in the first place.
And thirdly, implementing a new external whistleblower hotline actively provides confidence… confidence in the senior management of a company… confidence that senior managers know what they’re doing and are simply not prepared to accept any tolerance of wrongdoing.
This last, more than anything else sends a message to any potential wrongdoers… that wrongdoing – in whatever form it takes – will not be tolerated.
2) New Legislation compliance
New whistleblowing legislation and customs guidelines will always have an impact on businesses and organisations.
- 2021 US Customs and Border Protection (CBP) guidance being implemented.
- 2021 saw the implementation of EU Whistleblowing Directive. This also had – and is still having – a knock-on effect in the UK, despite Brexit, due to the need to maintain a level playing field.
- 2022 saw companies around the world making assessments on how this major piece of EU legislation affects their legal obligations, especially for those with divisions or legal entities within the European Union.
- 2023, the German Government implemented the Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG) compelling organisations with both direct and indirect suppliers to conduct due diligence obligations in order to improve human rights, material standards and environmental protection.
- 2024 saw the introduction of the Worker Protection Act in the UK.
- 2025 is already seeing the implementation of ECCTA, the Economic Crime and Corporate Transparency Act 2023 and E6 Regulation for whistleblowing in UK Higher Education.
And the list could on and on…
You only have to take a glance at the above to realise new whistleblower legislation needs constant monitoring and where necessary, actions taken to remain compliant.
3) Do the Right Thing
Many senior managers and directors want to do what’s right by their employees, and implementing an external whistleblowing reporting process as part of an Environmental Social Governance (ESG) plan is a quick and easy way to help do that.
But the really interesting thing is that there are massive benefits to doing the right thing too.
Workplace bullying or poor behaviour from a manager is cited by 15% as a cause of stress, mental health and depression in employees.[1]
By taking a proactive approach and addressing poor working conditions through a whistleblowing reporting line, an organisation can potentially increase staff retention and productivity.
Plainly speaking, looking after your employees means they will look after you.
4) Anonymity and Confidentiality through Enhanced Data Security
External providers often have advanced security measures in place to protect sensitive information. This ensures that whistleblower reports are kept confidential and secure from unauthorised access.
For instance, the best externally sourced speak up solutions operate to:
- GDPR standards
- ISO27001 certified
- CyberEssentials+ certified
- All their datacentres compliant with the highest security standards
- ISO 27001
- HIPAA
- FedRAMP
- SOC1
- SOC2
- UK G-Cloud
- Data Protection best practice measures including Symmetric AES256 encryption in transit and at rest; secured using two-factor authentication for clients
- Regular independent penetration testing to validate security controls and processes.
5) Increased Expertise in Handling Reports
External providers bring specialised expertise in receiving, managing and investigating whistleblower reports. This can lead to more thorough and impartial investigations, ensuring that issues are addressed effectively.
- An outsourced speak up service often has many years’ experience in interviewing whistleblowers. This maximises the quantity and quality of information provided, and enables reporting managers to better triage the incoming report.
- The best providers offer call handlers who are proficient in multiple languages, or experienced in working with translators from most global languages and dialects
- And when it comes to complex workplace incident reports, it is rare that HR departments or senior management have the skills, in-depth knowledge of the legislation, or the experience to investigate without outside support. In these instances outsourcing is the smart way to go.
6) Scalability whistleblower software, solutions and systems
As organisations grow, their need for robust whistleblowing systems increases.
External providers offer scalable solutions that can adapt to the changing needs of the organisation, accommodating more reports and users. Often scaling up through an external whistleblowing provider can be as easy as sending an email or picking up the phone to the account manager.
7) Speak up with a Global Reach
For multinational organisations, external providers offer solutions that comply with multiple international regulations and standards. This ensures consistency and compliance across different jurisdictions.
This is especially worthwhile when in today’s global economy a whistleblowing report can span several different sovereign states and involve multiple languages, head offices, regional offices, numerous other locations, and widely varying cultural views of whistleblowing and its benefits.
8) Cost Efficient whistleblowing systems
Implementing an external whistleblowing system can be more cost-effective than developing and maintaining an in-house solution. It reduces the need for additional resources and infrastructure.
9) Continuous Improvement
External whistleblowing providers often update their systems with the latest features and best practices. This ensures that organisations benefit from ongoing improvements and innovations in whistleblowing technology.
For instance, those whistleblowing solution providers who have their clients’ best interest at heart are constantly responding to both changes in how whistleblowers are making reports – which can vary widely in different parts of the world – and in how those reports are being triaged, managed and investigated by the client’s staff.
Sometimes this might mean additional whistleblowing software coding to adapt to the use of AI, and other times it might involve replacing or adapting to changes in multiple different telephone systems world wide.
At other times, it might mean the introduction of new training courses that support managers in implementing whistleblowing systems and processes, or providing expert free guidance on how best to approach a workplace investigation.
The client never needs to worry – or even think – about these issues. The whistleblowing provider will have them covered.
10) Employee Trust and Engagement
An external system can enhance employee trust and engagement by demonstrating the organisation’s commitment to ethical practices and transparency. Employees may feel more comfortable reporting issues to an independent third party.
- Perceived Impartiality: Whistleblowers often feel that external contacts are more impartial and trustworthy, which increases their likelihood of reporting. Research indicates that employees are more willing to report misconduct if they believe the whistleblowing process is effective and protects them from retaliation [1].
- Fear of Retaliation: The fear of retaliation is a significant deterrent for internal reporting. External systems are seen as safer options, as they provide anonymity and reduce the risk of negative career repercussions[2].
- Confidence in Protection: Employees are more likely to report wrongdoing if they have confidence in the protection and effectiveness of the whistleblower system. External providers often have robust safeguards in place to ensure confidentiality and security[1].
11) It’s Good PR
Gaining buy-in for a new whistleblower support service becomes an ‘easy sell’ when it will also allow the organisation to present a positive view of itself to both customers and employees.
Whilst being ‘seen’ to be caring has only a modest positive effect on share prices – ie: the perceived value of a company – being seen to lack a caring attitude can have a significant detrimental effect on an organisations value.
This can amply be seen in the Science Direct article ‘When ESG meets AAA: The effect of ESG rating changes on stock returns’.
This study of US companies between 2016-21 found that ESG – of which whistleblowing is a big part – provides modest gains of 0.5%, but the lack of ESG incurs a huge -1.2% per month risk.[3]
So, the real question becomes, why would an organisation not want to implement something that will actively support its value?
12) Future Proofing
Some companies only begin to look at fraud hotlines and whistleblowing vendors after they’ve been inadvertently caught up in wrongdoing by an employee or employees… other businesses and organisations might take a more far-sighted view – some might say wiser, even – and try to future-proof themselves ahead of time.
Think of future-proofing an organisation through a whistleblowing solution as a kind of insurance.
Quite often, simply having a whistleblower reporting system in place will actively discourage wrongdoing in the first place, and whilst you can never prove a negative – ie: you’ll never know how much wrongdoing you’ve avoided yourself – we might be able to see, through comparison of statistics within your industry, how much trouble an organisation ‘might’ have side-stepped.
For instance, fraud losses were 50% smaller at organisations with whistleblowing hotlines than those without[4]… and for every 1 EUR invested in whistleblower protection, there is a 22:1 ratio of potential payback in funds recovered[5].
What Will Your Reason be for Implementing a Whistleblowing Process?
There you have it… the twelve main reasons an organisation would want to set up an external whistleblowing service.
More and more businesses and organisations are choosing external whistleblowing service providers to help them implement whistleblowing reporting channels as part of the governance policies.
It’s not hard to see why.
Installing a whistleblowing system is relatively cheap in comparison to taking on staff and overheads internally; it ticks the legislation boxes; it helps you avoid trouble… both personnel and criminal; it can help improve productivity and good will amongst staff; they make you look good in the eyes of the world… which reflects in your stock and organisational value, and should the worst happen and wrongdoing occurs, you can genuinely say you’ve tried to stop it.
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