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Whistleblower Mechanism: A Critical Tool for Corporate Governance

As companies navigate the complexities of corporate governance, a crucial mechanism has emerged as a vital tool in maintaining transparency and accountability: whistleblower reporting. This mechanism is increasingly shifting from being driven by Internal Audit or Human Resources teams to being managed by Compliance teams.

The Companies Act 2013 Mandates

The Companies Act 2013 requires that the audit committee and independent directors oversee whistleblower complaints, with senior personnel managing day-to-day administration. A key feature of this mechanism is direct access for complainants to the Chairman of the Audit Committee, ensuring that perceived risks are mitigated promptly.

Reporting Whistleblower Complaints

Complaints reported through the whistleblowing mechanism must be documented and regularly updated on a centralized platform, providing details such as:

  • Complaint nature
  • Hierarchical levels involved
  • Investigation status
  • Financial or other losses incurred
  • Corresponding actions taken by the company

This transparency is essential for maintaining stakeholder trust.

Independence and Objectivity

For any successful investigation, independence and objectivity are paramount. Regulatory non-compliance, fraud allegations, or complaints from ex-employees/ employees on notice must be investigated by an independent team to ensure a fair and unbiased outcome.

Handling False Complaints

In cases where complaints lack sufficient facts or appear ambiguous, it is crucial for companies to build employee awareness around the purpose of whistleblower programs. This can discourage false reporting and ensure that investigations are focused on credible information only.

Deloitte Forensic’s Whistleblowing Services

Deloitte Forensic in India offers whistleblowing services and support to organizations, providing multi-channel and multi-lingual support for setting up effective programs. With experience supporting over 400 clients globally, Deloitte’s ISO-certified centers ensure confidentiality, privacy, and compliance with global whistleblower regulations.

Contact Us

For more information on how Deloitte Forensic can help your organization establish a robust whistleblowing mechanism, contact: