External Ombuds Models: Balancing Internal Governance and Independent Oversight
All organisations are susceptible to the risk of fraud and corruption. To mitigate this risk, whistleblowing has emerged as a vital shield to protect organisations from legal and reputational damage. Whistleblowers are encouraged to report misconduct and help organisations maintain good corporate governance practises.
Yet, despite the presence of formal mechanisms and policies, many employees still hesitate to report wrongdoings. The fear of retaliation, social isolation, career derailment or simply being ignored often discourages individuals from speaking up. This is where the external ombudsperson model is gaining momentum—an independent, third-party solution designed to protect whistleblower anonymity while ensuring fair and accountable handling of complaints.
Why Whistleblowers Often Remain Silent
A number of global surveys reveal that while a majority of employees witness misconduct at some point in their careers, only a fraction report it through formal channels.1 Some of the reasons for this are:
- Lack of trust in internal reporting systems
- Fear of reprisal or negative career impact
- Concern over confidentiality and privacy breaches
- Perception that no meaningful action will follow
This silence can be detrimental to an organisation’s reputation, culture and employee morale, and could have to penal consequences as well. In such a scenario, an independent, external ombuds model can come to the rescue. It can provide a neutral platform for complaint resolution and encourage a culture of speaking up across the organisation.
In 2021, a former Facebook (now Meta) employee, leaked internal documents alleging unethical content management practices. Despite Facebook having internal reporting channels, the complainant chose to go public, underscoring a lack of trust in internal systems. The case sparked global discussions on the need for external, protected whistleblower mechanisms.2
Who is an External Ombudsperson?
An external ombudsperson is a neutral, independent party, often a professional services firm or a specialised ethics consultant, who is appointed to receive, assess and manage complaints from whistleblowers. The ombudsperson operates outside the organisation’s reporting structure, offering a higher degree of confidentiality and impartiality. Complaints can be submitted to the ombudsperson through various modes:
Many systems allow whistleblowers to remain completely anonymous, while still enabling a secure, two-way communication between the complainant and the ombudsperson.
How External Ombudsperson Models Are Shaping a New Compliance Culture?
- How External Ombudsperson Models Are Shaping a New Compliance Culture?
One of the strongest advantages of engaging an external ombudsperson is the safe space it creates for whistleblowers. By guaranteeing that a complaint will be received and handled independent of internal politics, the model significantly reduces the fear of being identified, targeted or retaliated against.Industry Example
Daimler AG (Mercedes-Benz’s parent company) partnered with an external ombudsman law firm to manage whistleblower complaints. In one case, an employee anonymously reported emission related irregularities. The independent handling of the issue ensured that internal engineers weren’t exposed during the investigation, while regulators were appropriately informed. 3 - Neutrality and Independence in Investigations
Internal committees dealing with whistleblower complaints may struggle with bias or internal pressures. Independence becomes even more critical when the complaint involves senior leaders or sensitive departments of the organisation. An external ombudsperson however, provides a layer of objective oversight, giving the organisation confidence that every complaint is reviewed fairly and without any influence.Industry Example
In Australia, financial giant AMP faced backlash when internal whistleblower reports about harassment by senior executives were ignored. The company later shifted to an external whistleblower service, after public and regulatory pressure highlighted the risks of internal bias in such investigations.4 - Complaint Triage and Filtering
- Structured Documentation and Transparency
- Driving a Culture of Speaking Up
Many internal grievance systems are overwhelmed with complaints that are better suited for HR, customer service or line management. External ombudspersons are trained to filter and triage complaints based on pre-defined categories—like ethics violations, regulatory breaches or misconduct—ensuring that the whistleblower mechanism is not diluted by personal disputes or performance issues.
Unilever’s SpeakUp platform, managed by an independent provider, effectively categorizes complaints such as bribery or data manipulation. This facilitates the prioritization of cases for targeted investigation and resolution, enables early identification of unethical practices and maintains the integrity of whistleblower reporting.5
External whistleblower platforms ensure transparency as they are independent from the organisation. They provide clear communication to complainants at each stage and every complaint is logged, timestamped and tracked through to resolution.
Perhaps the most transformative impact of adopting an external ombuds model is cultural. When employees see that their concerns are taken seriously—even when raised anonymously and independently—it builds a culture of trust.
Siemens suffered a huge loss of trust following a bribery scandal which involved hundreds of employees and over €420 million in illicit payments. Internal and external investigations revealed systemic issues like poor oversight, complex structures, and a permissive culture toward bribery. Siemens brought in reforms including leadership changes, engaging an external ombudsman, compliance overhauls launching a comprehensive training programme on anti-corruption practises, etc.6
Conclusion: The Future of Whistleblower Systems is Hybrid and Independent
While internal reporting channels and ethics teams remain crucial, organisations can no longer rely on them alone to detect or address critical misconduct.
Staying silent is no longer the safest path to dealing with corporate ethical misconduct. However, speaking out is also not the safest path, unless the system truly provides protections. External ombuds models empower employees to report concerns without fear, while ensuring that companies handle them with rigor, speed and fairness. In doing so, these systems make whistleblowing not just an act of courage—but a sustainable pillar of organisational accountability.