Conflict of interest

A conflict of interest at the reporting office describes any situation in which the independence and impartiality of a person tasked with receiving and handling whistleblower reports is impaired. The German Whistleblower Protection Act (HinSchG) requires internal and external reporting channels to operate independently and the persons charged with reporting-office duties to act free from instructions and free from conflicts of interest. A conflict typically arises when the handling person is themselves affected by the reported breach, has a close relationship with the accused or the reporting person, or holds an additional role within the organisation whose objectives are at odds with unbiased investigation.

The entanglement of the reporting office with other corporate functions is particularly critical. Where the reporting office is staffed by employees from the HR, legal or audit departments or by a member of senior management, the interests typical of these roles – employer interests, liability avoidance, hierarchical dependence – can jeopardise neutral case handling. While the law does permit the reporting office to perform additional tasks, this is only allowed where those tasks do not give rise to conflicts of interest. The designated person must therefore be granted sufficient organisational latitude, and the compatibility of any dual role must be carefully assessed and documented.

To prevent conflicts of interest, a clearly defined escalation and substitution mechanism is advisable: if a conflict arises in a specific case, the affected person must refrain from handling it, and the report must be passed to an unbiased deputy, an external ombudsperson or the external reporting office. In addition, confidentiality, documented responsibility rules and – for smaller organisations – outsourcing the reporting office to an independent third party help safeguard the integrity of the procedure and the trust of whistleblowers. If a conflict of interest is ignored, this risks not only the ineffectiveness of the investigation but also reputational and liability exposure and the loss of the reporting system's protective effect.