The Securities and Exchange Board of India's committee
on corporate governance has suggested "whistle-blower
policy" where an official of a company who observes
an unethical or improper practice can approach the audit
committee of the company without necessarily informing
committee, headed by the Infosys Chief Mentor, Mr N.R.
Narayana Murthy, said the intention was to enable the
management to establish a mechanism for employees to report
concerns about unethical behaviour, actual or suspected
fraud or violation of the company's code of conduct.
mechanism must have adequate provisions to ensure that
there is no victimisation of employees who follow this
procedure, the committee in its draft report released
on Monday said.
also suggested that companies should take measures to
ensure that this right of access is communicated to all
employees through means of internal circulars. The employment
and other personnel policies of the company shall contain
provisions protecting "whistle-blowers" from
unfair termination and other unfair prejudicial employment
practices, the report said.
company has to annually affirm that it has not denied
any personnel access to the audit committee of the company
in respect to matters involving alleged misconduct and
that it has provided protection to whistle-blowers from
unfair termination and other unfair
or prejudicial employment practices. Such affirmation
has to be part of the board report on corporate governance
that is required to be prepared and submitted together
with the annual report.