Active compliance management
Compliance and good governance
Everyone talks about compliance these days and it is often connected with negative associations, such as embezzlement, corruption and unethical conduct. Upon discovery of irregularities and abuse, reputational damage and fines are often considered as a relatively mild sanction for the affected company.
An increasing number of such irregularities and abuse and a legislator, which is imposing stricter sanctions, have caused more and more companies to consider compliance and good governance and to recognise compliance as an awareness creating process.
The passive approach to compliance, which is limited to compliance with national and international rules and regulations, is replaced by an active compliance management system that also provides the infrastructure to monitor the compliance with the relevant rules and the sanctioning of any breaches of such rules.
An active compliance management system consists of multiple related components. A sophisticated compliance code accessible to all stakeholders is the basis for all further procedures. Whistle-blowing systems allowing an anonymous notification of breaches of the compliance code constitute the essential technical infrastructure in order to transform the internal set of rules into an effective and compulsory code of conduct.
So far different whistle-blowing systems have been established, whereby web-based whistle-blowing systems have significant advantages over other types, such as whistle-blowing hotlines, a mere e-mail inbox or an external ombudsman.
An online-based whistle-blowing system limits the submission of notifications to a catalogue of breaches, which are subject to the compliance policies of the company
The individual input mask requires the whistle-blower to submit a structured notification. Thus, the quality and significance of the received notifications are increased.
Received notifications are clearly documented and the whistle-blower can complete and evidence the notification by uploading files (e.g. supporting documents, photos).
By ensuring the anonymity – whistle-blowers can for example not be compromised by their voice on the phone – whistle-blowers are encouraged to notify irregularities.
A continuous communication between the compliance officer and the whistle-blower is possible. Thus, whistle-blowers can actively contribute to the further discovery of irregularities, even though they can remain anonymous.
Whistle-blowers can subsequently disclose their identity in order to benefit from legal privileges (e.g. witness agreeing to give evidence in criminal proceedings, reduction of sentence).