What is whistle blowing? :
What is whistle blowing? The term “whistle-blowing” originates from the practice of British policemen who blew their whistles whenever they observed commission of a crime.
Whistle-blowing refers to “disclosure by organization members (former or current) of illegal, immoral, or illegitimate practices under the control of their employers, to persons or organizations that may be able to effect action”
Whistle-blowers can be:
External: Lawyers, mass media, law enforcement,
or watchdog agencies
internal: Designated officer, employees or
superiors in the same organization
Types of misconduct whistle blowers can report:
Illegal or unlawful conduct
Unprocedural conduct
Unethical conduct
Wasteful conduct Benefits:
Increases safety and well-being of organization
Reinforces organization’s code of ethics
Reduces organizational waste and mismanagement
Improves employee morale
Mechanism for Whistle Blower as per C49 :
Mechanism for Whistle Blower as per C49 Clause 49 recommends companies to establish a mechanism for employees. Mechanism which is adopted by organization for whistle blower:
Communicating the existence of a whistle-blowing policy to employees
Adoption and encouragement of the policy (for all listed companies)
Assigning Ombudsmen, providing special telephone numbers and email IDs
Providing high degree of protection to whistleblowers
Procedure for whistle blowing
To Prevent Whistleblowing, Encourage Whistleblowing.. :
To Prevent Whistleblowing, Encourage Whistleblowing.. The OBJECTIVES of an internal whistleblowing program should be:
To encourage employees to bring ethical and legal violations they are aware of
To minimize organization's exposure to the damage that can occur when employees circumvent internal mechanisms
To let employees know the organization is serious about adherence to codes of conduct
BARRIERS to a successful internal whistleblowing program could be:
Lack of trust in the internal system
Unwillingness of employees
Misguided union solidarity
Belief that management is not held to the same standard
Fear of retaliation or alienation from peers
Steps for Creating a Whistle-blowing Culture :
Steps for Creating a Whistle-blowing Culture Create a Policy
Get Endorsement From Top Management
Publicize the Organization's Commitment
Investigate and Follow Up
Assess the Organization's Internal Whistleblowing System
Organizations will have to institute rigorous policies to allow employees to bring unethical and illegal practices to the forefront. Companies will have to train managers and executives on how to encourage openness. Putting processes in place will not be quick, but it is certainly necessary given the increased public scrutiny of corporate behavior
Mechanism for Whistle Blower – How to implement? :
Mechanism for Whistle Blower – How to implement? Designating an ombudsperson for overseeing and managing compliance issues within the organization
Mode of communication of compliant is defined in the policy (such as mail, call, hotline numbers)
Ombudsperson formulates an investigation process for the breach of:
Code of Ethical Business Conduct
Accounting
Internal Accounting Controls
Auditing matters and applicable national and international laws including statutory/ regulatory rules and regulations.
Redressal committee consisting of experts formed to conduct investigation process
Confidential clause for non-disclosure of information will form part of policy to safeguard whistle blower
A whistle blower need to communicate the complaint with sufficient evidences orally or written form
Ombudsperson presents quarterly update or report to Board of Directors
Safeguards of whistleblowers :
Safeguards of whistleblowers Potential whistle-blowers will not report internally if they fear reprisals within organization or suspect that the management condoned or approved the illegal activity. To encourage whistle-blowing, whistle-blowers must be protected:
Genuine whistle-blowers must be adequately protected to encourage them to report wrongdoing in the organization
Whistleblowers who make false allegations should be punished
As whistle-blowers face retaliation, ostracism, dismissal or death threats, their organizations must make it safe for them to blow the whistle
The internal accountability of a organization can be enhanced by adopting three-pronged strategy:
Provision of ethics training for all its staff
Punishing staff who violate its code of ethics
Establishing an internal whistle-blowing mechanism with safeguards to protect whistle-blowers
Slide 8:
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