Whistleblowing and the ongoing compliance debate keep the media and the wider press busy and readers alert. And yet these days, executives of reputed global companies are finding themselves imprisoned for fraud and other compliance violations like never before. Enormous fines and even jail penalties were recently imposed upon global players inside and outside the U.S. and hardly a day goes by without new details being reported. Solid facts about who knew what and gave orders to whom remain nevertheless in a grey zone or even completely unknown. Besides the question of who should be fined or sentenced by public prosecutors, one could ask whether some or all scandals could have been avoided by whistleblowers.
What if employees or line managers had disclosed and reported the ongoing scandals early on — either internally, using whistleblowing hotlines or other compliance schemes, or even, in extreme cases, going public by filing criminal charges with the prosecutor? Had top management or the board been alerted and duly informed early on, could the drastic consequences now imposed by U.S. courts and federal agencies against these executives have been avoided altogether?
Well, only recently did the German Corporate Governance Code (the “Code”/DCGK) amend its Sec. 4.1.3 (3rd sentence) that “employees shall be given the opportunity to report, in a protected manner, suspected breaches of the law within the company” and “third parties should … be given this opportunity.” The Code’s objective is to make the German Corporate Governance system transparent and understandable. Its aim is