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Only few companies have robust whistleblowing systems – ensuring an adequate admininstration of whistleblowing reports

Published: 14 September 2023

Two out of three leading listed companies in Norway, Sweden and Denmark appear to lack the critical elements of a robust whistleblowing system according to Position Green's recently published report on ESG100. It can be speculated that the numbers are even higher for smaller companies. An effective whistleblowing system is a hallmark of a well-designed corporate compliance program. When incidents get reported early on, companies are given an opportunity to address potentially unethical business conduct before it has adverse effects on their operations. What are the best-practice elements of such a whistleblowing system and the benefits that come with it?

On 8 September 2023, Position Green published an ESG100 report
(Report) analyzing how well-prepared companies in Norway, Sweden and Denmark are for the introduction of the EU's European Sustainability Reporting Standards (ESRS). The Report is based on the most recent environmental and social governance reporting data from the leading 100 publicly listed companies in Denmark, Sweden and Norway respectively.

On the topic of social governance, the report addresses, amongst other topics, companies' whistleblowing systems. According to the Report, 93% of the companies have a whistleblowing system in place. However, few of these are aligned with best practice. 66% of the whistleblowing systems appear to lack at least one of the following critical components:

Availability to external stakeholders
Administration by an impartial and independent body
Description of safeguards to protect whistleblowers from retaliation

The ability to report confidentially and the adequate and timely follow-up of whistleblowing reports are other crucial elements of a robust whistleblowing system. The Norwegian Bar Association recently published an updated version of the Guidelines for Independent Investigations which provides valuable guidance also for internal investigations. Schjødt partner Thomas Brandi was appointed as member of the expert panel that revised the Guidelines.

The Guidelines set out elements that are essential in order to promote a fair and transparent process which provides trust among internal and external stakeholders, and that might be decisive when individuals are considering whether to report a critical incident or not. Schjødt has adopted the key principles of the Guidelines in its investigation practices.

Schjødt's Corporate Compliance & Crisis Management and Employment & Pension teams collaborate closely, and have extensive experience with the establishment of robust whistleblowing systems and the investigation of reported concerns. Together, the teams seamlessly assist our clients with:

Advice on the establishment or enhancement of a whistleblowing system
Administering an external whistleblower channel for your company, ensuring an independent and impartial handling of reported concerns
Conduct or advise on investigations of allegations reported by a whistleblower, whether in close cooperation with internal resources or independently
Advice on relevant remediation measures
Providing targeted compliance training, from basic training on ethical conduct and speaking up to in-depth training on investigations

With offices in Norway, Sweden and Denmark, Schjødt is the only full-service law firm that can deliver seamless legal services across Scandinavia, including providing clients with a whistleblowing hotline ensuring timely and adequate follow-up of whistleblowing reports arising from their pan-Nordic operations.