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Corporate liability and whistleblowers

What can I do to fulfill my obligations as an entrepreneur?

from
Markus Schmuck
Lawyer
Specialist in criminal law

Give me a call: 0261 - 404 99 25
E-Mail:

For banks, insurance companies and other businesses, criminal acts, administrative offenses or other misconduct can result in significant material and immaterial damages. On the one hand, proceedings that become public, even at the suspicion stage, damage the trust in correct action and thus the reliability of the company in general, and on the other hand, costs and risks are incurred by the company or the person(s) responsible for the company. Even the mere suspicion of corruption can affect future and current contract awards, the company's public image, its word-picture brand, all marketing and business structures, and ultimately the overall perception from the outside.

Here, too, corporate responsibility means: instruction of all employees at all management levels and regular random checks. But it also means introducing a sensible reporting structure within the company so that management has the opportunity to obtain internal information at an early stage. Blockwartmentalität or Denunziantentum are thereby neither desired nor are such to be encouraged. However, what is ultimately important is the assumption of corporate responsibility with the implementation of the necessary measures. The keyword here is the Sarbanes-Oxley Act (SOX) from 2002.

Since whistleblowers often fear possible personal disadvantages for passing on their knowledge, the establishment of a reporting structure (whistleblowing) that protects the reporting person is an obvious solution.

Responsible companies or companies that are directly or indirectly subject to SOX appoint an ombudsman who accepts and processes confidential information regarding internal or external misconduct related to the company. This ombudsman is then bound by the power of his office (Lawyer) and additionally bound by contractual confidentiality, so that although the facts of the case are passed on, the identity of the person reporting them is not – for fear of reprisals. In this way, issues that could ultimately damage the company or have the potential to do so are uncovered or even prevented, thanks to the company's familiarity with the model.

For almost all industries and company sizes, the introduction of a whistleblower system makes operational sense. Please feel free to contact Markus Schmuck.

The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.