Implementing an effective compliance helpline – Europe edition

Compliance helpline is essential part of compliance program, since it’s critical for early detection of misconduct, so it can be dealt with internally before major material damage occurs and before becoming public and damage company’s reputation, too.

Effective compliance helpline also helps corporation and its leaders to demonstrate due supervision and professional diligence in managing risk exposures, which can protect from the legal liability. Not to mention that effective compliance helpline management strengthens the prevention activities of compliance program and enhances corporate integrity and culture of compliance and ethics.

Nevertheless, a compliance helpline has first become obligatory by law for financial institutions in European Union, including for the financial supervisors. Other companies are just starting to embrace, as compliance programs evolve in Europe and the European Whistleblowers’ protection directive is due.

This is the time to implement (or enhance) an effective compliance helpline, if you are a Europe based company or are operating on the EU market.

How effective is one compliance helpline management is shown by the following indicators:

• what is the reporting rate and its trends,
• how fast are we responding to concerns,
• how are the prevention, protection and remedial measures communicated internally and how is retaliation being mitigated,

The same indicators can also tell us in what condition is our corporate culture.

It’s well known that there are specific cultural issues in Europe regarding compliance helplines, so it’s crucial to take first steps carefully, addressing these issues gradually, even before you start a compliance helpline from scratch, or perhaps you will re-launch it.

If you are a corporate executive or a bord member responsible for implementing, supporting, directing or supervising effective internal control system or a compliance officer, and want to build an effective compliance helpline in a European operation, consider these steps:

1. Show respect and understanding to values (not just the laws) of privacy, which employees cannot be denied even when at work – and this right is protected by laws, many times even by the constitution. Discuss with different stakeholders how they fear a compliance helpline will affect the value of privacy (or is perceived as doing so), and how you have thought about it.
2. Emphasis the reasons and benefits that an effective internal channel can bring to a company and its employees.
3. Discuss other issues with different stakeholders and address their concerns, as well as expectations; due to respect of corporate hierarchy, start with local top managers – managers of all levels are often reserved, because they worry about “their” employees passing them with issues of their responsibilities, powers… and control; top executives can have issues facing all the concerns raised through helpline – they see trouble and extra work in this for themselves;  employees on the other hand wish to have a direct contact on upper independent level to raise concerns, but they usually don’t want to expose themselves and are specifically doubtful about same rules and measures being applied to everyone (regardless the level of authority in the organization); you might just experience cynicism of this by the workers unions, but these are calls for help and dialogue, which needs to be held (not endlessly, of course).   
4. Use softer and more neutral wording, especially if a company never had a compliance or ethics helpline before; for example use “a helpline” never “a hotline”, use “raise issues or concerns”, “ask questions or raise concerns about conduct” rather than “report misconduct” and instead of “internal investigation”, better use “check facts and circumstances of a raised concern” and similar.
5. Communicate clearly that it’s encouraged to speak to colleagues and a superior about different issues first and use the helpline to raise concerns only when they are not able to find resolution with their direct leader, if they tried and it didn’t work or have serious worry to be retaliated against.    
6. Take care of legal privacy issues about the helpline, of course; in some European countries, anonymous reporting is only allowed for more serious misconduct, in some other – you need approval by Information Commissioner and in all European countries you need to inform individuals (employees) upfront what data can be processed regarding a compliance helpline and for what purpose; this is still left to individual countries to decide, based on the Directive, but some EU countries have specific provisions in a whistleblowers’ protection law that anonymous reports can or must be enabled.   
7. Make a whistleblowers’ protection or an internal reporting system tour around various operations and business units; have regular employees and management training in this topic.

As you go along, be ready that your compliance helpline might get zero reports in a European company even in a period of one year, especially in smaller ones. However, experience show that in Europe (and possibly elsewhere), you can apply existing best practices from US about managing a compliance helpline, after you took enough time to communicate and implement it and then keep doing that persistently.

It’s also important to train local compliance staff in Europe that not every report (or a concern raised) has “a report” written on it. Many times, even in bigger corporations, employees will search for ways to share their concerns, raise issues and seek resolution or remedy internally; however they are not going to do that through official helpline in most cases. Employees are more likely to raise concerns informally; like sharing “a buzz”, or “just asking”, sometimes confining to compliance staff upon trust and direct personal contact. Many times, you can use this as a hint to find something as a consequence of your compliance audit for example, without ever explaining to anyone that there was an issue raised by employee.   

In the end, it’s critical to show as early as possible positive effects of a compliance helpline and show them to all the stakeholders with which you have discussed it at the beginning, to gain extra support and confirm trust.

Andrijana Bergant

Originally published as personal article in 2014, with minor updates in November 2024