What helped companies successfully manage the COVID-19 crisis and why whistleblower protection played an important role

Every year, BDO conducts an international survey on the risks that move the world. Top company representatives from all over the world are thinking about these risks. This year's Global Risk Landscape largely focused on the management of the COVID-19 crisis.

The main message of this year's survey is that companies that are not afraid to take risks did much better during the pandemic. Take a risk during a pandemic? Easier said than done. What did the companies that took on greater risk and successfully managed it have in common?

Success factors included the ability to look at things from a different perspective, open communication, process flexibility and the care of people – employees, partners and the general public. The loyalty gained helps to overcome various crises.

Important mechanisms for responsible business also include whistleblower protection. It offers stakeholders the opportunity to communicate safely and easily about what is bothering them. It therefore helps to build trust in relationships, which supports long-term cooperation.

Whistleblower protection

As we informed you earlier, from next year, Czech companies and organisations will also have to establish procedures and channels for receiving complaints from whistleblowers. Companies are worried about what the new obligation will mean for them. This year's BDO Risk Landscape confirms that those who care about their people and surroundings can handle crises better. I am convinced that many companies and owners like this approach, despite otherwise not being partial to European Union jargon.

My goal is to support our clients in seizing opportunities and managing the risks associated with the new regulation. There are many new responsibilities. I have therefore prepared an overview of the most important ones for you.

Who is affected by the new obligations?

The new obligations will not only affect state organisations or large multinational corporations. An internal reporting system will have to be set up by all companies and organisations with 25 or more employees, as well as public contracting authorities, except for municipalities with less than 5,000 inhabitants. The new obligation will affect most companies and organisations.

What is an internal reporting system or ethics line?

Companies and other entities will be obliged to introduce a so-called internal reporting system or ethics line. The purpose of the ethics line is to allow whistleblowers to use an internal channel instead of passing information on to external control bodies. The company can thus detect fraudulent behaviour in a timely manner, prevent it and avoid further damage, including reputational damage or the imposition of a sanction. Based on the notifications received, the company should implement corrective measures to prevent similar adverse events in the future. The system must conceal the identity of whistleblowers and protect them from retaliation.

Who can submit a report?

The circle of whistleblowers, i.e. persons protected by law, is very wide. In addition to employees, they can also be jobseekers, interns, members of the board of directors or the supervisory board. However, suppliers or those interested in a contract may also report. It is therefore important that the possibility to submit a report is easily accessible to all those entities. An effective solution is, for example, a secure internet form on the company's website.

How can a report be submitted and by when must it be processed?

It must be possible to report in writing, by telephone and in person. The whistleblower will have the right to know the findings of the investigation within 30 days of the report. In justified cases, this period may be extended.

Internet applications can make the operation of the internal reporting system easier. Today's technologies enable the quick and easy implementation of an ethics line, which serves for submitting reports and at the same time as a helpdesk or communication platform. The application will help monitor deadlines, whether the report was submitted via the application or, for example, by telephone and subsequently registered in the application by the administrator. This degree of centralisation also contributes to the protection of whistleblowers' personal data. The tool will allow them to draw attention to problems and risks in the company through a secure form. Both whistleblowers and companies themselves will benefit by having more control over their risks.


What are the risks associated with whistleblower protection?

Failure to comply with the obligations arising from the Whistleblower Protection Act should result in heavy fines – up to CZK 1 million or 5% of net turnover for the last completed accounting period. The whistleblower will also be able to contact the Ministry of Justice directly. For this reason, too, it is in the interest of companies that their internal reporting system be credible and simple.

The goal of BDO is to bring pragmatic and affordable solutions. I will be happy to set up and manage whistleblower protection for you.