If your organisation does business in the Netherlands and has more than 50 employees, you are impacted by the “House for Whistleblowers” Act, which passed on 1st July. Learn more about what you need to know—particularly if you're a small or medium enterprise looking for affordable, effective solutions—in this post, and in our related legal brief.
In March 2016 the Dutch Senate passed the “House for Whistleblowers” Act (Huis voor Klokkenluiders) to protect the interests of whistleblowers. This Act came into effect on 1st July.
Whilst the rules currently only apply to companies in the Netherlands, the increasingly global nature of the way the world does business means the legislation will affect many organisations with operations in the Netherlands—whether they’re headquartered there or not.
And, unlike previous legislation, the new rules apply to any public or private sector company with over 50 employees.
The new rules—and the best ways for small and medium organisations to comply with them—are detailed in our legal brief, "The Netherlands 'House for Whistleblowers' Regulation: How Small & Medium Sized Enterprises (SMEs) Can Prepare," which I co-authored with Geert Vermeulen, CEO at Ethics & Compliance Management & Consulting (ECMC). Several key points of particular note:
- Organisations must now have an internal procedure in place for employees to report suspicions of misconduct
- An employee can contact the House for Whistleblowers Advisory Chamber for guidance on how to report and general information on reporting
- Employees can turn to the House of Whistleblowers Investigation Chamber if they feel they their employer has not responded to their report properly
- Employers must now have a documented internal procedure to deal with employee whistleblowers and to protect them from retaliation (this can be handled internally or outsourced to a third party vendor such as NAVEX Global)
It only takes one issue to cause a crisis, whatever size your firm, so the internal reporting stage is crucial. But even more so for SMEs because incidents of malpractice can have a disproportionate effect, making it important to evolve a speak-up culture that ensures issues are nipped in the bud early.
Six Ways to Comply With the New Laws—and Strengthen Your Speak-Up Culture
- Take a holistic approach to compliance reporting, of which the whistleblowing/reporting system is one key part. Encourage employees to use the whistleblowing helpline or contacting their manager or a member of the compliance team to report misconduct they have witnessed.
- Engage the board and senior leadership. The right tone from the top is crucial as it sets expectations for the rest of the organisation. Additionally, make sure your frontline managers are trained in how to respond to reporters, and make sure they have a mechanism to report these "open door" cases.
- Train staff and ensure they know how to report. Post awareness-building materials that include the helpline number to make sure that employees know where to go when reporting and also how to report. Use multiple methods, such as posters and banners, as well as reminders through your intranet and other electronic communications.
- Create a reporting helpline that goes beyond reporting incidents. Letting employees know they can also use the hotline as a "helpline" encourages employees to ask questions around company policies, ethical dilemmas and guidance on how to act in difficult situations.
- Make sure reports are being acted upon promptly. Putting a helpline in place is only one piece of the puzzle. Make sure that reports are properly addressed by the right individuals in a timely manner. A centralised incident management system is a critical help.
- Carefully consider how you refer to your hotline. Whilst the new Dutch legislation refers to "whistleblowers," we advise firms to consider moving away from terminology that can have negative connotations and instead use terms such as "Ethics Hotline" or "Speak-Up Hotline."
Hotline data that is carefully tracked, reviewed, benchmarked and presented with sufficient context often provides the early warning signs needed to detect, prevent and resolve problems before they escalate. With this in mind, it is possible for SMEs to implement a small but effective compliance and ethics programme that can have key positive effects to the business.
Small and medium-sized organisations often mistakenly assume that external reporting mechanisms are only available to larger firms. Learn more about the hotline and incident management solutions we offer specifically for small and medium enterprises. Talk to a solutions expert today.