According to the Companies Act, 2013 & Rules, 2014 It is mandatory for:
- • All the listed companies
- • Companies that accept deposits from the public
- • Companies which have borrowed money from Banks and PFI in excess of Rs.50 crores under section 177(9) read with Companies (Meetings of Board and its Powers) Rules, 2014.
Companies that are required to constitute an audit committee shall operate the Vigil mechanism through the audit committee and if any of the members of the committee have a conflict of interest in a given case, they should recuse themselves and the others on the committee would deal with the matter on hand.
For other companies, the Board of directors shall nominate a director to play the role of the audit committee for the purpose of Vigil mechanism to whom other directors and employees may report their concerns.
It provides adequate safeguards against victimization of employees and directors who avail of the Vigil mechanism and also provides for direct access to the Chairperson of the audit committee or the Director nominated to play the role of the audit committee, as the case may be, in exceptional cases.
Types of Whistleblower:
Internal
A Whistleblower may be within the organization who discloses any illegal, immoral or illegitimate practices to the employer. He/she may be-
- Employee
- Superior officer or
- Any designated officer
External
A whistleblower may be outside the organization who discloses any illegal, immoral or illegitimate practices to the company. He/she may be-
- Lawyers
- Media
- Law Enforcement
- Watchdog Agencies
Whistleblower Hotline
Define
- Stakeholders
- Key Processes for WB Mechanism
- Law enforcement
- Watchdog agencies
Create
- Ethics Committee & Ombudsman Function
- Ethics Hotline
Manage
- Reported Complaints
- Disclosure Requirements
Investigate
- Reported Violations
- Process Divergences