More whistleblower programmes on the way
Many Danish businesses have probably asked themselves how they can prevent a case such as the IT Factory scandal emerging in their own organisation. Early on a Monday morning, some of these businesses met at Kromann Reumert for a seminar on whistleblower programmes.
While whistleblower programmes have been common in the USA for some time, Danish organisations have not focused on setting up formal schemes to help uncover fraud until now. Pia Kirstine Voldmester, an associate partner with Kromann Reumert, has no doubt that we will see many more whistleblower systems in Denmark in the future.
"It is safe to say that whistleblower systems will gain ground in Danish organisations in the years to come. First and foremost, it will be businesses of a certain size, with an international orientation and increased focus on CSR that will implement formalised systems," she says.
Whistleblower programmes form an integral part of the anti-corruption area of CSR for those businesses that have adopted the United Nations Global Compact ten principles of social responsibility.
Could it have been us?
The IT Factory case really sparked interest in Denmark to set up formal whistleblower systems. This was reflected quite clearly when a number of businesses came together for the whistleblower seminar at Kromann Reumert in mid-January.
"Perhaps the IT Factory scandal might have been limited to a smaller scale incident if there had been a formal whistleblower system within the company", Ms Voldmester states. "There have been rumours that the chairman of the board of directors received an anonymous e-mail about the fraud, but did not take it seriously. If the e-mail had been received via a formal whistleblower system that included an inherent duty to investigate such communications, the case might have been brought to an end much earlier. At the seminar it was clear that businesses need advice on how to set up internal systems that will help them avoid similar situations and at the same time secure the best possible protection of their employees – both with regard to the informer and the accused."
Provides peace of mind
As a starting point, employees always have an obligation to react appropriately in their workplace if they suspect a colleague of irregularities at work. However, it is not always psychologically feasible for staff to do so, and it may also be very unpleasant indeed for the person accused. Therefore, many Danish organisations work towards formalising the reporting options, for example by means of an Internet portal, or by mail to an external supervisory control – typically a lawyer. But businesses are often not aware of the legal requirements for such systems implied by the Danish Act on Processing of Personal Data (persondataloven) and the Danish Data Protection Agency.
"Businesses can see the point in working towards further formalisation of their systems. This will ensure that they are able to address cases of fraud in time. Also, it provides peace of mind for both the business and the employees when there is a fixed framework controlling the steps that will occur when something suspicious is reported," Ms Voldmester explains.
Whistleblower prevented a new case developing
Shortly after the whistleblower seminar at Kromann Reumert, yet another case of fraud was reported by the media. By means of a whistleblower regime, Vestas in Spain had managed to prevent a case from developing into a fully-fledged scandal. This example emphasised the importance of a formal whistleblower system for a business exposed to fraud. "While fraud may never be preventable, it can be limited – and discovered in time", concludes Ms Voldmester.