Risk Management Software: How to Find the Right ERM Tool
Do you want to professionalize the growing tasks in risk management with a (new) ERM software? Identifying the right tool…
n addition to ESG reporting obligations, such as the Supply Chain Act and the CSRD, the Whistleblower Protection Act is putting many companies under pressure. The good news is: as with any other challenge, there is suitable software for this too, which will significantly help you implement the compliance rules.
In this article, we show you what requirements result from it, how to choose the right whistleblower software, and what benefits it offers.
Up front: such a system is not only used to meet obligations, but also to create a trustworthy and ethical working environment in which potential violations can be identified and corrected early on. This promotes a culture of integrity in your company and makes you more attractive to talent.
You already know your way around the topic of whistleblowing and would like to get relevant tool providers suggested right away? 👉 Go to the whistleblower software provider matching .
Whistleblower software is a technological solution that enables employees and other stakeholders to anonymously report concerns about illegal or unethical practices within a company.
The European Union’s whistleblowing directive protects both internal and external whistleblowing. If misconduct is reported to a company’s senior manager, this is internal whistleblowing. It is external, on the other hand, if the breach is reported to a person or institution outside the company, for example the police or the public media.
The biggest challenge for whistleblowers in companies is the lack of anonymity. Because even though the EU protects whistleblowers, the hurdle of reporting misconduct in one’s own workplace is often high. The fear of termination or other consequences from supervisors or colleagues is simply too great.
With whistleblower software, this problem can be avoided. Through anonymous contact, employees and other stakeholders can report misconduct without being directly associated with it. At the same time, the whistleblower system ensures that processing and analysis are compliant with the EU whistleblowing guidelines and the GDPR.
This allows employees to report violations and misconduct without hesitation, while companies can identify problems early and take solution-oriented, de-escalating measures.
Whistleblowing in companies refers to reports by employees and other stakeholders when misconduct by company management is present. Reasons for whistleblowing in companies include, for example:
Unethical behavior, such as harassment or discrimination in the workplace
Environmental violations, such as improper disposal of waste or violations of EU directives
Financial violations, such as fraud or embezzlement
Security risks, such as defects in products that endanger employees and/or consumers
Violation of policies and laws, such as non-compliance with the Lieferkettensorgfaltspflichtengesetz.
In general, whistleblowing software can be useful for all companies, because according to the EU Whistleblowing Directives, all companies must at least ensure that they have suitable reporting channels in place. While this does not necessarily have to be in the form of whistleblower software, it offers a simple, secure, and anonymous solution.
For companies in the EU, the above-mentioned EU Directive 2019/1937 on the protection of reporting persons and the detection of breaches has been in force since December 2019.
In Germany, the Hinweisgeberschutzgesetz (HinSchG) applies, which, among other things, requires the use of whistleblower software or comparable systems in companies from 50 employees.
In our view, even with fewer than 50 employees, whistleblower software makes sense in order to proactively provide a solution for reporting misconduct. In particular, providers of HR management software are suitable, where anonymous reporting is included as an extended feature.
We have already clarified that employees benefit from the anonymity of whistleblowing software. Such a system can do far more than just send anonymized messages:
Central platform
The administration and analysis of reports happens centrally in one place, which makes handling easier.
Automation
Automatic notifications inform the responsible people and departments immediately, making direct intervention possible.
Archiving
Documenting all reports in the whistleblowing system ensures that, in the event of legal investigations, all necessary documents are available. Ideally, you should configure an interface to your compliance software right from the start.
Analysis
Not all whistleblowing software offers an analysis function, but larger companies in particular benefit from the advantages. It enables the system to detect recurring issues and identify trends, making proactive intervention possible.
Legal requirements
This function guarantees compliance with the laws and guidelines mentioned above, ensuring that whistleblowers receive an acknowledgment of receipt within seven days and are informed about further measures within three months.
Whistleblowing software belongs to the top-level category of GRC software types, because whistleblowers are key people in the area of “G” (G = governance). Irregularities such as corruption, fraud, or violations of environmental regulations are meant to be uncovered so that organizations can respond quickly in internal risk management while also improving corporate governance practices.
Before you start looking for the right provider, we’d like to give you a few tips to help you find the right whistleblowing tool:
Learn about the HinSchG. Check which legal and regulatory requirements apply to your company and whether the whistleblower software is legally compliant.
Make sure the internal resources for implementing the software are available.
Consider which additional functions the whistleblower software should bring to your MarTech stack and ESG tech stack.
Is your company operating internationally? Check whether multilingual reporting and submission for whistleblowers is enabled.
Anonymity: We can’t say it often enough—anonymity is the most important point from the whistleblowers’ perspective. But not all whistleblowing systems offer anonymous reporting. To ensure that all concerns and violations are actually reported, this feature should definitely be included in the software.
Our top tip: Use our matching platform to find the system that fits you perfectly. More information at the end of the article.
The Whistleblower Protection Act shows the growing awareness of protecting whistleblowers. But which features must whistleblower software provide, now that companies with 50 or more employees are also required to use a reporting system? Our assumption: The future will bring greater protection and better automation, from which both whistleblowers and companies will benefit.
You are looking for whistleblower software or other solutions in the ESG space? Benefit from our expertise from over 700 sustainability matchings for mid-sized companies: Use Matchilla’s matching platform to optimize your procurement process.
Instead of trawling through endless lists and visiting comparison portals, we connect you directly with three suitable providers. You submit a match request in just a few minutes: What are you looking for? What is particularly important to you? What are your challenges? We match this request with our database and present you with the three most relevant providers in your matchboard – a shortlist instead of many longlists. In the matchboard, you can compare everything at your leisure and ultimately make a well-founded decision. The entire matching process and use of the platform are free of charge and non-binding.
Would you like to know which whistleblower solution best fits your requirements? Simply fill out the Match Assistant. 
Ulrich Theves is Head of Matching at Matchilla and is deeply involved in technical solutions for whistleblowing. He has one of the best overviews of the market and shares his expertise from the many customer conversations at MatchZINE.
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