Whistleblowing – A Guide to Compliance: Part 3b

Crowell & Moring LLP’s 2021 series of client alerts: Whistleblowing – A Guide to Compliance is intended to provide companies with a practical guide to help them comply with their obligations under the EU Whistleblower Directive. Via a monthly alert, Crowell & Moring LLP will explain the different steps that companies need to take for compliance and emphasize various points for consideration.

STEP #3b: Cultural differences to bear in mind when implementing the EU Whistleblower Directive: some specific points for companies operating in Belgium

As we detailed in our last Alert #3, multinational companies need to take special care when implementing the provisions of the EU Whistleblower Directive. They need to ensure that the implementation is appropriate for all the countries in which they operate, and, as we highlighted in our last Alert, the EU Whistleblower Directive is part of a global rise in whistleblowing and whistleblower protection.

Different countries have different social cultures and this can have an impact in a variety of ways. For this supplemental Alert, we asked our colleagues from Square Circle, with whom we recently hosted a webinar on this topic (see also our Alert #2), to add their perspective and draw your attention to some of these cultural differences so that you can take them into account as you set up a whistleblower procedure that suits your company in its entirety.

The influence of culture on the implementation of the EU Whistleblowing Directive

When implementing whistleblowing programs, communication is key for establishing trust. Trust is a cultural construct, and communication programs must therefore take into account cultural aspects, especially in an international or multi-cultural environment.   

The U.S. has a long-standing tradition of whistleblowing, and internal whistleblowing is seen as part of internal control, with people actively encouraged to speak up and report issues. External whistleblowing is also encouraged and seen to be in the public interest, and whistleblowers are often depicted as heroes – romanticized in Hollywood films, like weak Davids tackling their Goliath – seeking to right ethical wrongs as they fight to expose the truth.

In Europe, the story is slightly different – possibly because of its collective history. In continental Europe, the emphasis on speaking up is not as strong, and there is great reliance on trust and cooperation between employer and employee.

So, ethical and cultural principles affect not only the decision whether or not to blow the whistle but also how whistleblowers are reacted to and perceived. 

Individualism versus collectivism

Western Europe and North America are often described collectively as Western individualist cultures – in contrast to countries such as Japan or China, which are considered to be Eastern collectivist cultures. In general, individuals from individualistic cultures are encouraged to openly share their different perspectives and “speak up” because the action of sharing their thoughts is regarded as honest and freedom of speech is valued.

Yet, while Northern Americans endorse a highly individualistic, vertical, competitive culture that strives for autonomy, this is not uniformly the case across Western Europe. For example, Belgians, like the Dutch and the Danes, favor a more egalitarian variant of individualism. Egalitarian individualists are autonomous and independent, but put greater emphasize on the value of equality. Vertical individualists accept more marked differences in status, resulting in people competing to be the best. This is an important distinction to consider when it comes to inspiring people to report perceived wrong-doing.

In vertical individualist countries, like the U.S., U.K., Germany and France, value statements should refer to excellence in order to be effective, and codes of conduct should emphasize individual accountability and action. In Belgium, Sweden and Denmark, value statements that appeal to social justice will be more effective. 

The effect of power distance

Power distance is a cultural concept that describes people’s comfort in interacting across hierarchical levels, and their beliefs about involvement in decisions. 

In Belgium, there is a cultural contradiction in this regard: although highly individualistic, the Belgians respect hierarchy. This combination creates a specific tension and results in the fact that good personal relationships between managers and their team members are of key importance in leveling out apparent inequality. 

In traditional hierarchical organizational structures, loyalty is valued even though it can end up impeding the flow of communication from the lower to the upper ranks.

In Belgium, decision-making is consensual, and good personal relations at work are instrumental in getting things done. This means that generally accepted beliefs about involvement in decision-making, alongside the spill-over effect that a professional dispute is likely to have on an employee’s personal life, may act as a deterrent to a potential whistleblower. But the chain-of-command remains important in all hierarchical cultures, and it is vital that a company’s ethics, including the importance a company gives to whistleblowing, be clearly articulated from the top down.  

Avoiding uncertainty

Another major difference between the U.S. and Belgium is the level of uncertainty that companies are usually prepared to accept. In the U.S., companies are often happy with a moderate avoidance of uncertainty, but Belgium has an uncertainty avoidance expectation that is one of the highest worldwide. Cultures that favor a high uncertainty avoidance have a low tolerance for ambiguity and vagueness, and favor rules and a well-structured environment over unknown or unstructured situations.

People living in cultures with a low tolerance for uncertainty are naturally risk-averse, will prefer job stability, carefully planned projects, and clear rules and procedures. In such a case, lack of information is often cited as a key reason why individuals do not act responsibly, and providing context is key. Ethics programs and whistleblowing procedures will be most effective if they are accompanied by clear examples and rules.

Expats and international collaboration

Research shows that ethical standards differ depending on the nationality of managers and the culture of their home, rather than their host, country. Interestingly, it would seem that corporate policy has little influence on a manager’s ethical attitudes and decisions. Therefore, employees recruited from the host country may have different views from parent-country nationals about what is “ethical,” and this can cause tension that has the potential to disrupt the organization’s operations.

In addition, whistleblowers are not limited to one country. Information available to an employee in one country, may very well be exposed by a colleague in another.

In conclusion, it is therefore advisable, when setting up a whistleblower procedure, to make sure that the procedure is globally acceptable throughout your company, and takes into account your company’s different cultural environments.

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Our team assists clients with the complete whistleblowing implementation process. For more information please contact the professionals listed below: