External Ombudspersons are part of an efficient Compliance System
Corruption and other criminal acts in or against companies happen secretly. Whistleblowers are the most important sources in uncovering irregularities in organizations. The most valuable tips come from insiders – people who have something to lose. Many issues would never be discovered if one of the people involved did not decide to come forward. If one wants to effectively combat corruption and crimes committed from within and against companies, one must provide “dropouts” or “silent observers” with an opportunity to report facts without having to fear that they will be caught in the “open knife”.
The idea of an external lawyer of trust
Bearing all that in mind, the idea (which has since been well established) of implementing an external lawyer of trust – also known as “ombudsman” or “ombudsperson” – arose. Ombudspersons are appointed by companies to obtain information about potential criminal acts within or against the company. By reporting to the ombudsperson, whistleblowers can provide information in an orderly procedure without having to reveal their identity. If and to the extent desired, the ombudsperson preserves the whistleblowers’ anonymity towards the company. The assurance of confidentiality ensures that whistleblowers are less reluctant to report a critical issue. The company, in turn, receives reliable information on the basis of which decisions can be made about appropriate follow-up action (such as clarification of the facts, correction/termination of the misconduct, disciplinary actions, criminal prosecution).
Protection by anonymity
A whistleblower who does not have the option of contacting an external ombudsperson in an anonymous and protected way has few alternatives. If he/she contacts the public prosecutor’s office directly, he/she may face criminal prosecution himself/herself. If the whistleblower hands in his report in an anonymous letter, there is no possibility to ask him supplementary questions or to check his credibility. Furthermore, the whistleblower cannot be provided with any feedback and therefore will not get to know what happens to his/her information. This leads to a one-way communication that serves nobody’s interest.
Hence, some companies (especially larger ones) offer electronic channels through which a whistleblower can submit a report anonymously and communicate with the company afterwards. However, many potential whistleblowers are reluctant to use such channels for their reporting as they do not know who is seated on the receiving end.
In case of doubt, a whistleblower who is unable to contact a lawyer of trust will therefore decide not to report an issue at all. Neither the legislator nor the companies concerned have – or should have – any interest in this consequence.
No legal guidelines for ombudsperson activities yet
The activities of ombudspersons are currently not explicitly regulated by German law. If a whistleblower contacts a lawyer as a lawyer of trust, he benefits from the lawyer’s professional competence and the professional legal framework within which the lawyer is allowed to act. By means of contractual arrangements, it is possible to guarantee the whistleblower a level of confidentiality that only lawyers can offer: The company irrevocably waives all claims to information and surrender arising from the client relationship with the appointed lawyer of trust. Furthermore, the lawyer will only pass on the pieces of information that the whistleblower expressly releases.