Whistleblowing Report: Misconduct in nearly 39 per cent of companies

39 per cent of companies in Germany, Switzerland, France and Great Britain experienced misconduct such as tax fraud, money laundering or sexual harassment in 2018. This is according to the "Whistleblowing Report 2019" which draws upon a survey of 1,392 companies with more than 20 employees across these four countries.

This international study was conducted by the University of Applied Sciences HTW Chur and the Munich-based technology provider EQS Group. The results show that misconduct was most prevalent in large companies with more than 249 employees. German companies were the most frequently affected by misconduct at 43 percent, followed by the British (40 percent), French (38 percent) and finally companies headquartered in Switzerland (35 percent). Of these companies, 17 per cent estimated the financial damage resulting from misconduct to have been more than EUR100,000. Financial risk mitigation was in fact stated as being one of the main reasons for setting up internal reporting systems along with protection against reputational damage.

Only 59 per cent of companies have reporting systems

Against the background of the EU directive on whistleblower protection, adopted by the European Parliament in April, it is interesting to note that in Germany (56%) and France (53%) only about half of companies have a reporting system. In Great Britain and Switzerland , the adoption rate is slightly higher (both 65%). The directive will mark a significant change, requiring that all companies with more than 50 employees have a system in place. In the sector comparison, banks and insurance companies are those most likely to have reporting channels for whistleblowers.

On average, the companies with a system in place offer potential whistleblowers three ways of contacting the relevant department. In addition to general reporting channels (personal meetings, letters, telephone, fax and e-mail), specialised channels are also provided. These include hotlines and web-based systems. In Great Britain, companies with a system in place have set up a hotline (45%) and/or a web-based whistleblower channel (39%) more frequently than in the three other countries. By contrast, in Germany, web-based systems are still the least widespread with a share of only 24%.

Reporting systems are first and foremost for employees. In more than half of companies, customers and suppliers can also point out illegal or unethical actions. The systems are only however available to the general public in about one in five companies.

Every second report is relevant

The majority of companies with a reporting system received at least one report last year and the average number of total reports was 52. Of these, every second report was relevant and well-founded. Nearly 30 per cent of the companies surveyed were able to unearth more than 60 per cent of their total financial loss through their reporting system. Only a fraction of the whistleblowing reports were malicious.

Whistleblowers prefer to remain anonymous. For the companies that make this possible, 58 per cent of initial reports were received without any reference to the identity of the person submitting the report. Moritz Homann, Managing Director Corporate Compliance at EQS Group, explains: "Guaranteed anonymity reduces any other inhibitions whistleblowers may have. Companies should therefore support anonymous reporting."

Prof. Christian Hauser, project manager at the University of Applied Sciences HTW Chur, and study manager says: "Reporting systems are an effective tool for disclosing illegal and unethical behaviour and also protect against reputational damage. The study shows that companies also benefit from their reporting system in many other ways."

The proportion of companies with reporting systems is likely to increase further, partly due to recent legislative initiatives such as the EU directive or the Sapin 2 law, which has already come into force in France. This is also reflected in the study: more than a third of the companies surveyed without a reporting system stated that they were discussing introducing one or specifically planning to implement one in the next 12 months.

You can view the complete study here: www.whistleblowingreport.org

Key figures in comparison:

About this study

The Whistleblowing Report 2019 was carried out as part of an applied research and development project of the University of Applied Sciences HTW Chur in cooperation with EQS Group. The project partners published their first comprehensive scientific study on whistleblowing systems in Swiss companies in 2018 (Whistleblowing Report 2018). Due to the positive response and relevance of the topic, the survey was conducted again this year and extended to cover Germany, France and Great Britain. The project is co-funded by Innosuisse - the Swiss Innovation Agency.

About EQS Group:

EQS Group is a leading international provider of regulatory technology (RegTech) in the fields of corporate compliance and investor relations. In working with EQS Group, thousands of companies worldwide inspire trust by fulfilling complex national and international disclosure obligations, minimizing risks and communicating transparently with stakeholders.

EQS Group's products are pooled in the cloud-based software EQS COCKPIT. They ensure the professional control of compliance workflows in the fields of whistleblower protection and case management, policy management, insider list management and disclosure obligations. In addition, listed companies benefit from a global newswire, investor targeting and contact management, IR websites, digital reports and webcasts for efficient and secure investor communications.

EQS Group was founded in 2000 in Munich, Germany. Today the group employs around 500 professionals and has offices in the world's key financial markets.

www.eqs.com

About HTW Chur:

The University of Applied Sciences HTW Chur is an innovative and entrepreneurial higher education institution with around 1,700 students. It trains people to become responsible and skilled professionals and managers. As a university of applied sciences with strong regional roots, HTW Chur attracts students from beyond the canton and even from outside Switzerland with its welcoming atmosphere. With its applied research, it contributes to the development of innovations, knowledge and solutions for society. HTW Chur offers a range of bachelor's, master's and further education programmes in Architecture, Civil Engineering, Digital Science, Management, Multimedia Production, Photonics, Technology and Tourism. It is also actively involved in applied research and development and provides consultancy and other services across all its disciplines. Institutional accreditation in accordance with the Federal Act on Funding and Coordination of the Swiss Higher Education Sector (HEdA) as well as the gaining of four stars as part of the "EFQM Recognised for Excellence" peer-assessment and certification under ISO 9001 and ISO 29990 provide an important basis for HTW Chur's overall development. The innovative University of Applied Sciences of Graubünden has been part of the University of Applied Sciences of Eastern Switzerland (FHO Ostschweiz) since 2000. As of January 2020 the HTW Chur will be the 8th public-law university of applied sciences in Switzerland. The university's history dates back to 1963 with the foundation of the "Abendtechnikum Chur", a technical college offering evening courses. The University of Applied Sciences HTW Chur has been an independent legal entity under public law since 1 January 2006.The Swiss Institute of Entrepreneurship (SIFE) and the Swiss Institute of Information Science (SII), two institutes of the University of Applied Sciences HTW Chur, are involved in this applied research and development project.

www.htwchur.ch

Contact:

Alexander Mrohs
EQS Group AG
+49 89 210298420
alexander.mrohs@eqs.com

Prof. Dr. Christian Hauser
University of Applied Sciences HTW Chur
+41 81 286 39 24
christian.hauser@htwchur.ch