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Whistleblowing as an Opportunity to Discover the Black Sheep in an Organisation

Whistleblowing as an Opportunity to Discover the Black Sheep in an Organisation

Czech Republic
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Why is a whistleblowing system necessary and how can it help you save your good reputation, organization, investments, and even your freedom?

It is common especially in larger organizations that the interests of ordinary workers, management and the owners are different. Often even diametrically opposed. For instance, an ordinary worker might be motivated to make his job easier, or even to make money “on the side.” The management could set up a scheme for the payment of bonuses or the functioning of an organization in such a way that they make profit over the short term, or they might benefit from closing shops that are unprofitable for the organization as a whole. This is not very widely discussed, but is in fact a sad reality to which we should not turn a blind eye. As you know from our previous post, such management cost the company Wirecard (and therefore its investors) billions of euros, the organization as a whole is facing an investigation on suspicion of money laundering, and some management executives have been arrested on suspicion of fraud and other criminal offences. How can this be avoided?

One of the ways is to establish an internal reporting system, thanks to which the management and owners of an organization can quickly learn about activities that are illegal or harming the organization. Such conduct could then be nipped in the bud and not dealt with at the stage when the state authorities have already started a formal investigation, or when the entire case is already in the media. A timely solution can save not only the organization and its assets, but also the good reputation of the organization and its employees. A functional reporting system can also exempt the organization from criminal liability for the conduct of its employees or the members of its statutory bodies. The system is also a positive sign to potential investors that their nest egg will not turn into a write off from one day to the next. And last but not least, it will soon be mandatory for some organizations to introduce such a reporting system.

So is it enough just to download model reporting instructions from the Internet and hang them on the notice board? Unfortunately not. In order for the system to work, in the first place employees must know about it, and they must know how to use it. Also, there must be clearly established rules for dealing with reports so that employees can rest assured their report will be properly investigated. And finally, it is necessary to build up an organization culture in which workers are not deterred from reporting and on the contrary are encouraged to report important well-founded information. Of course, any negative sanctions against workers that submit reports in good faith are unacceptable.

So how should one go about setting up such an internal system correctly and what should be avoided? We will tell you this in just a few days.

By Michal Nulicek, Partner, Bohuslav Lichnovsky, Senior Associate, and Anna Cervanova, Associate, Rowan Legal

Czech Republic Knowledge Partner

PRK Partners, one of the leading Central European law firms, has been helping clients achieve their business objectives almost 30 years. Our team of lawyers, based in our Prague, Ostrava, and Bratislava offices, has a unique knowledge of Czech and Slovak law and of the business environment. Our lawyers studied at top law schools in the United States, United Kingdom, Switzerland and elsewhere. They also have experience working for leading international and domestic law firms in a number of jurisdictions. We speak your language, too. Our legal team is fluent in more than 15 languages, including all the key languages of the region.

PRK Partners has one of the most experienced legal teams on the market. We are consistently rated as one of the leading law firms in the region. We have received many significant honours and awards for our work. We represent the interests of international clients operating in the Czech Republic in an efficient way, combining local knowledge with an understanding of their global requirements in a business-friendly approach. We are one of the largest law firms in the Czech Republic and Slovakia. Our specialised teams of lawyers and tax advisors advise major global corporations as well as local companies. We provide comprehensive legal advice drawing on our profound knowledge of local law and markets.

Our legal advice delivers tangible results – as proven by our strong track record. We are the only Czech member firm of Lex Mundi, the world's leading network of independent law firms. As one of the leading law firms in the region, we have received many national and international awards, in some cases several years in a row. Honours include the Chambers Europe Award for Excellence, The Lawyer and Czech and Slovak Law Firm of the Year. Thanks to our close cooperation with leading international law firms and strong local players, we can serve clients in multiple jurisdictions around the globe. Our strong network means that we can meet your needs, wherever you do business.

PRK Partners has been repeatedly voted among the most socially responsible firms in the category of small and mid-sized firms and was awarded the bronze certificate at the annual TOP Responsible Firm of the Year Awards.

Our work is not only “business”: we have participated on a longstanding basis in a wide variety of pro bono projects and supported our partners from the non-profit sector (Kaplicky Centre Endowment Fund, Tereza Maxová Foundation, Czech Donors Forum, etc.).

Firm's website: www.prkpartners.com

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