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The Whistleblower Policy

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Who is a Whistleblower?

Definition: The term Whistle-blower and its application have been rather recent in legal as well as corporate history of India. However, as a concept it has been in existence for a long period of time. In general, a ‘Whistle-blower’ can be a person or a group of persons, who expose the fraud, corruption, willful wrongdoing or similar unethical acts those may be non-permissible under law. The whistle-blowers can be employee or former employee or vendors or affiliates of any organization deviating from the good management practices.

There are different types of whistle blowers which are described as following –

a. Internal: When whistle blower, while being employed with the organization, reports the wrong conduct or activities of an official or a colluded effort by a group of people in an organization.

b. External: When the issues pertaining to the wrong practices or willful misdeeds are reported by people who are outside the system – these people can be individuals or in the form of organizations such as media, public interest groups or any other such agency. Such whistle blowers are known as external whistle blowers.

c. Alumni: When the whistleblowing is done by a person who is no more employed by the organization but he is acting on the willful wrongdoings he has witnessed during his employment with the organization. Such ex-employees can unearth such deliberate mismanagements with the relevant authorities.


The corporate world is based on the most important factor of reliability which is ‘Transparent Governance’. Ability of an organization to inculcate a transparent governance system, which encourages adoption of ethical business practices, can provide a significant impetus to have sustainable growth and continued business for longer term. This can be achieved by establishing effective management systems and robust policies to detect and minimize acts of frauds and corruption in the company.

The existence of such policies in the form of legislative act has always been there even before the enactment of Whistle-blower Act, it was well recognized under Section 177(9) of Companies Act that all public listed companies have to mandatorily establish a vigilant mechanism for employees and senior executives. On top of that it has been made mandatory to establish a whistle blower policy with clear and adequate safeguards against victimization of whistle-blowers.

Feasibility of a whistleblowing policy depends solely upon the intent with which an organization firstly wants to enact it and secondly wants to execute it. Such policy should not only give direction to complaints regarding any violation but alsike should specifically convey the results and in worst case even the failure to report should also fall into the violation of policy. Some of the key points to understand the framework can be as following –

The policy must provide a mechanism and channel to report violation on any level. Such mechanisms should be presided by the chairman of the board. The entire pyramid of hierarchy, right from an entry level employee to the director should be allowed to report any violations of the policy. Discriminations, willful negligence of quality, colluded frauds, and misappropriation of budgets are some of the cases those should always get reported.

In the event that such a case is reported, the senior management shall take-up the investigation and any false evidence shall be dealt with seriously. Zero harassment should be assured to the whistle-blower by the management in the policy itself and no retaliation in whatsoever form should be tolerated.

Full confidentiality shall be maintained at all the times to safeguard the whistle-blower. Such policy should have exception to not protect a whistle-blower from disciplinary action if allegations are proven unfounded and with willful malicious intent.

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