For decades at the level of the European Union whistle-blowers, i.e. employees of a public organization or private enterprise reporting or disclosing information about a criminal act obtained in the course of their work did not enjoy any specific, broad and effective legislative protection. On the contrary, this type of complaint (exposure) has sometimes had a negative connotation due to the internal conflict of interest between the complained companies and the complaining employees, as well as the moral dilemma that this conflict creates.

In the last decade, this perception has begun to change significantly. This was facilitated by the emphasis on the important role of whistle-blowers in uncovering illegal activities that are detrimental to the public interest and therefore the well-being of society as a whole, leading to the issuance of European Directive 2019/1937. Through it, a legislative attempt is made to establish a framework for broad and effective protection of whistle-blowing and, in particular, complaints concerning breaches of areas of EU law against discouraging and retaliatory practices. Our country has recently started to incorporate this directive into its law with the help of law 4990/2022. But can whistleblowing, in addition to its contribution to the prevention of damage to the public interest, also contribute to better management of business risks and, therefore, better business operations? To answer this question, we must first consider the economic side of the issue. Businesses that engage in or engage in illegal activities such as fraud, bribery, unfair practices, etc. not only have a direct financial impact on them (imposing fines and penalties, paying excessive compensation, reaching painful settlements, paying long-term legal battles, etc.), but above all causes serious damage to their commercial reputation, which entails, among other things, indirect financial consequences.

Equally important is the ethical aspect of whistleblowing in relation to the relationship between the company being complained about and the employee being complained about. Business does strive to make a profit, but this goal cannot be detrimental to the public interest and society as a whole.

Our country has recently started to integrate the European Whistleblower Protection Directive.

In this regard, the whistleblower, as an employee, has a moral obligation of loyalty to his employer, which in no way prevails over the moral obligation of the company to society as a whole, and therefore to the employee, to use only legal means to achieve its goal, which must carry a positive social sign. Thus, the whistleblower has a moral right to act as the last line of internal control over any illegal activity of the business in which he works.

The adoption by companies of a system of effective protection of whistleblowers should be considered by them not mechanically as another formal obligation of the law, but as another tool for their meaningful development. And this is because it not only contributes to reducing the financial impact, but also contributes to the cultivation of business ethics, increased transparency, increased corporate brand awareness, easier access and attraction of talented human resources, to the strengthening of corporate social culture and, consequently, to the decline in business risks.

Mr. Charalambos A. Skordakis is an Associate and Risk Manager at PwC Greece.