Whistleblower Policy: A scientific approach Page 1

INTRODUCTION
All Organizations face the risk of things going wrong from time to time, or of unknowingly
harboring illegal or unethical conduct. Thus, a culture of openness and accountability is essential
in order to prevent such situations occurring and to address them if they do occur. Whistleblower
policy is a scientific approach that sets out a framework to raise such concerns. It is an important
framework of Corporate Governance.
1

Whistle blowing is the disclosure of information which relates to suspected wrongdoing or
dangers at work. This may include criminal or unlawful activity, miscarriages of justice, danger
to health and safety, damage to the environment, failure to comply with any legal obligation or
regulatory requirement, bribery, incorrect financial reporting, breach of our internal policies and
procedures including the Code of Conduct, fraud or mismanagement, negligence, other activities
which amount to serious improper conduct and the deliberate concealment of any of the above
matters. A whistleblower
2
is a person who raises a genuine concern in good faith relating to any
of the above matters. If he has a genuine concern related to suspected wrongdoing or danger
affecting any of these activities, he should report it under this policy.
The fundamental element of this policy is that whistleblowers are protected from victimization,
harassment or disciplinary action as a result of any disclosure, where the disclosure is made in
good faith and is not made maliciously or for personal gain.
This project report aims to explore the meaning of Whistle-blower Policy, the rationale of
making it a part of the Corporate Governance Code and the usefulness of such a policy in
ensuring better governance.





1
http://www.investopedia.com/terms/c/corporategovernance.asp(Last accessed on 1
st
April14) The system of rules,
practices and processes by which a company is directed and controlled. Corporate governance essentially involves
balancing the interests of the many stakeholders in a company - these include its shareholders, management,
customers, suppliers, financiers, government and the community. Since corporate governance also provides the
framework for attaining a company's objectives, it encompasses practically every sphere of management, from
action plans and internal controls to performance measurement and corporate disclosure.
2
http://www.investopedia.com/terms/w/whistleblower.asp (Last accessed on 1
st
April 2014), Anyone who has and
reports insider knowledge of illegal activities occurring in an organization.
Whistleblower Policy: A scientific approach Page 2

OBJECTIVES
The main objective of the study is:
To understand the meaning of Whistleblower Policy.
To study its importance and procedure for raising a whistleblower concern.
To understand how whistle blower policy act as a framework of corporate
governance.

RESEARCH METHODOLOGY
This research methodology adopted in dealing with the project is descriptive & analytical in
approach. It is largely based on secondary & electronic sources of data. Books, case laws,
journals & other reference as guided by faculty of corporate law are primarily helpful for the
completion of this project.

SCOPE AND LIMITATIONS
The scope of study extends to the meaning and importance of whistle blower policy. The project
also discusses the detailed procedure for raising a whistleblowing concern. It also deals with
Indian scenario regarding whistleblowing. The last part of the project discusses how
whistleblowing policy has evolved as a new scientific approach towards corporate governance.
The research project suffers from certain limitations, for eg. The limited access to sources of
data and materials, limitations with respect to time and also with respect to space in which the
research is limited.




Whistleblower Policy: A scientific approach Page 3

Chapter 2: Whistle Blower Policy

2.1 Meaning: The term whistle-blower comes from the word whistle which referees uses to
indicate an illegal or foul play
34
. US civic activist Ralph Nader coined the phrase in the early
1970s to avoid the negative connotations found in other words such as "informers" and
"snitches"
5
. Also, the practice of English bobbies who would blow their whistle when they
noticed the commission of a crime. The blowing of the whistle would alert both law enforcement
officers and the general public of danger.
Whistleblower policy is a scientific approach. It is an important framework of Corporate
Governance. Whistle blowing is defined as the disclosure of information which relates to
suspected wrongdoing or dangers at work. This may include criminal or unlawful activity,
miscarriages of justice, danger to health and safety, damage to the environment, failure to
comply with any legal obligation or regulatory requirement, bribery, incorrect financial
reporting, breach of our internal policies and procedures including the Code of Conduct, fraud or
mismanagement, negligence, other activities which amount to serious improper conduct and the
deliberate concealment of any of the above matters. This policy applies to all individuals
working at all levels of the organization, including senior managers, officers, directors,
employees, consultants, contractors, trainees, home workers, part-time and fixed-term workers,
casual and agency staff, volunteers and third party contractors (collectively referred to as staff
within this policy).
There are four broad components of whistle-blower policy: A whistle blower, a wrongful or
unethical practice, an authority and a policy.
6

A whistleblower: A whistle-blower is a person who raises a concern about wrongdoing
occurring in an organization or body of people. Usually this person would be from that same
organization. The revealed misconduct may be classified in many ways; for example, a violation
of a law, rule, regulation and/or a direct threat to public interest, such as fraud, health/safety
violations, and corruption. Whistle-blowers may make their allegations internally (for example,

3
Etymonline.com". Etymonline.com. Retrieved 2014-04-04
4
"Wordorigins.org". Wordorigins.org. Retrieved 2014-04-04.
5
Nader, Petkas, and Blackwell, Whistleblowing (1972).
6
"Component of Whistleblower Policy". InternalAuditExpert. Retrieved 4 April 2014.
Whistleblower Policy: A scientific approach Page 4

to other people within the accused organization) or externally (to regulators, law enforcement
agencies, to the media or to groups concerned with the issues).
A Wrongful or Unethical Practice: There are various grievance or complaint mechanisms that
are instituted by organizations. The wrongful practice or unethical conduct that is sought to be
covered under the whistle-blower policy is expected to be grave and serious in nature, and may
involve several parties. These practices may concern serious disregard to the law of the land
(e.g., dealing in narcotics without a license), a crime against human rights (e.g., child trafficking,
dealing in human organs), corruption of a high order (e.g., supply/use of substandard or expired
medicines in a hospital), compromise of the organizational values (e.g., bribery, unfair trade
practices) and similar serious acts.
An Authority: The policy defines a specific process to be followed for escalation of information
regarding the wrongful or unethical practice. The person/authority to which the communication
may be sent, the manner of sending communication and the manner in which the information
received would be dealt with is clearly defined in the policy. It is felt that the management is
often the last in the knowledge-chain where a rampant wrongdoing is concerned, as the
employees and other stakeholders are not sure who to report to and not secure as to how it would
impact their relationship with the organization. Thus, the authority which deals with the
information provided by a whistle-blower must be independent, senior and responsible and the
policy must provide for confidentiality of the information as well as the identity of the informer.
7

A Policy: A whistle-blower policy is thus an internal policy on access to the appropriate
designated authority, by persons who wish to report on unethical or improper practices. The
policy is intended to create a platform for alerting the management of the company or those
charged with the Governance of the company about potential issues of serious concern, by
ensuring confidentiality, protection and expedient action. The Corporate Governance Code in
India specifically states that the whistle-blower must have a direct access to the Chairman of the
Audit Committee for reporting on wrongdoings by the senior management.



7
Mary Rowe, "Options and choice for conflict resolution in the workplace" in Negotiation: Strategies for Mutual
Gain, by Lavinia Hall (ed.), Sage Publications, Inc., 1993, pp. 105119.
Whistleblower Policy: A scientific approach Page 5

2.2 Importance of Whistleblower Policy
In todays fast-paced world and mega corporations, institution of a whistle-blower policy is not a
corporate luxury, but an organizational necessity. The benefits of such a policy are fostering
good governance by encouraging employees to escalate deceitful actions by colleagues/
seniors/third parties, Promotion of the organizational values thus nurturing a culture of openness
in workplace, Sending a clear message that severe action will be taken against unethical and
fraudulent acts, Dissuading employees from committing fraud by instilling fear of unfavorable
consequences when caught and Early alerts to diffuse a potentially larger disaster.
8


2.3 Procedure for raising a whistle blowing concern
In many cases, the whistleblower can raise his concerns with line manager. He may tell the
manager them in person or put the matter in writing if mentioning his/her name, address and
contact details, description of the Malpractice and giving the names of those alleged to have
committed a Malpractice. In some cases, he may refer the matter to the Chairman of the
Companys Board. However, where the matter is more serious, he may contact any one of the
following: the Whistleblower Officer, the Corporate Legal Counsel or the CEO. Whistle blowing
policy is based on confidentiality. Whistleblowers who are concerned about possible reprisals if
their identity is revealed should come forward to the Whistleblower Officer and appropriate
measures can then be taken to preserve confidentiality, giving consideration to the seriousness of
the issue raised, the credibility of the concern; and the likelihood of confirming the allegation
from attributable sources.

Protection and Support: It is seen that whistleblowers are sometimes worried about possible
repercussions. Thus, the policy must encourage openness and support to those who raise genuine
concerns in good faith under this policy, even if they turn out to be mistaken. Whistleblower
must not suffer any detrimental treatment as a result of raising a concern in good faith.
Detrimental treatment includes dismissal, disciplinary action, threats, harassment, victimization

8
Why Your Company Should Have A Whistle blowing Policy by Tim Barnett, Assistant Professor of Management,
Louisiana Tech University Sam Advanced Management Journal, Autumn, 1992, pp. 37-42.

Whistleblower Policy: A scientific approach Page 6

or other unfavorable treatment connected with raising a concern. No one should threaten or
retaliate against whistleblowers in any way. Anyone involved in such conduct will be subject to
disciplinary action.

I nvestigation: The action taken in response to a report of concern under this policy will depend
on the nature of the concern. The Appointed Supervisory Board shall receive information on
each report of concern and follow-up information on actions taken. Once the concern is raised,
the committee or board will carry out an initial assessment to determine the scope of any
investigation, whether an investigation is appropriate, and the form that it should take. Some
concerns may be resolved without the need for investigation. In some cases, an investigator or
team of investigators including staff with relevant experience of investigations or specialist
knowledge of the subject matter may be appointed the investigator(s) may make
recommendations for change to minimize the risk of future wrongdoing. If it is found out that a
whistleblower has made false allegations maliciously, in bad faith or with a view to personal
gain, the whistleblower will be subject to disciplinary action. If the whistleblower is happy with
the way in which his concern has been handled, he may contact the chairman of the Supervisory
Board. The aim of this policy is to provide an internal mechanism for reporting, investigating
and remedying any wrongdoing in the workplace.
The Board of Directors has overall responsibility for this policy, and for reviewing the
effectiveness of The Whistleblower Officer, in conjunction with the Board of Directors should
review this policy from a legal and operational perspective. All staff is responsible for the
success of this policy and should ensure that they use it to disclose any suspected danger or
wrongdoing. Staff is invited to comment on this policy and suggest ways in which it might be
improved. Comments, suggestions and queries should be addressed to the Whistleblower Officer
or the Corporate Legal Counsel.





Whistleblower Policy: A scientific approach Page 7

2.4 Some Instances of Whistle-blowers of Global Acclaim:
Sherron Watkins of Enron, Coleen Rowley of FBI
9
and Cynthia Cooper of WorldCom awarded
The Persons of the Year 2002 by Time Magazine are classic examples of whistle-blowers in
America.
10
Sherron Watkins was the Enron Vice-President who wrote a letter to Chairman
Kenneth Lay in the summer of 2001 warning him that the companys methods of accounting
were improper. In January, when a Congressional subcommittee investigating Enrons collapse
released that letter, Watkins became a reluctant public figure, and the Year of the whistleblower
began. Coleen Rowley was the FBI staff attorney who caused a sensation in May with a memo to
FBI Director Robert Mueller about how the Bureau brushed off pleas from her Minneapolis,
Minn., field office that Zacarias Moussaoui, who is now indicted as a September. 11 co-
conspirator was a man who must be investigated. One month later Cynthia Cooper exploded the
bubble that was WorldCom when she informed its board that the company had covered up $ 3.8
billion in losses through the prestidigitations of phony book-keeping.

Chapter 3: Indian Scenario of Whistle blowing Policy
3.1 Background: Securities Exchange Board of India (SEBI)
11
has prescribed the listing
agreement that is required to be executed between a stock exchange and a company whose
securities are to be listed on that exchange. Clause 49 of the listing agreement is titled Corporate
Governance and lays down the principles of Corporate Governance that are required to be
followed by the listed company. In addition to a list of mandatory requirements that a listed
company is obliged to comply with, there are a few non-mandatory requirements that have been
specified in terms of Annexure I D of the specimen listing agreement. One such non-mandatory
requirement relates to Whistleblower Policy. The specific recommendation, placed in
Annexure I D to Clause 49 specifies that :(i) The company will establish a mechanism for
employees to report to the management concerns about unethical behavior, actual or suspected

9
http://www.wanttoknow.info/911/9-11_summary_articles/020521coleenrowleymemofbidirectormueller. Retrieved
2014-04-04.
10
http://www.time.com/time/personoftheyear/2002/
11
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1357290354602.pdf
Whistleblower Policy: A scientific approach Page 8

fraud or violation of the companys code of conduct or ethics policy.
12
(ii) The mechanism must
provide for adequate safeguards against victimization of employees who avail of the
mechanism.(iii) The mechanism must also provide, where senior management is involved, direct
access to the Chairman of the Audit Committee.(iv) The existence of the mechanism must be
appropriately communicated within the organization.(v) The Audit Committee must periodically
review the existence and functioning of the mechanism.
While this is a non-mandatory requirement, the company also has a mandatory requirement to
disclose, in its report on corporate governance, the extent of adoption of such non-mandatory
requirements. Numerous companies have adopted the Whistle-Blower Policy in their
organizations in their quest to uphold the highest governance standards or in the fear of being
considered late entrants to the well-governed companies club.
A similar provision for protection of whistle- blowers is found in the Sarbanes-Oxley Act of
2002, which forms part of the United States Federal Law. S. 806 of this Act protects employees
who provide information or assist in an investigation from discharge, demotion, suspension,
threats, harassment or any form of discrimination.
13
The Sarbanes-Oxley Act has now increased
the protection provided to whistle-blowers. The provisions have made it clear that retaliation
against whistle-blowers will not be tolerated. It is now a criminal offence to retaliate against
whistle-blowers, carrying penalties from a large fine to 10 years in prison.
Corporate India was slow to respond to the non mandatory requirements of Clause 49 in general,
and the clause relating to the whistle-blower policy in particular. However, it is heartening to
find that an increasing number of companies are now realizing the need to pay heed to these non-
mandatory requirements.



12
Faunce, T.A. "Developing and Teaching the Virtue-Ethics Foundations of Healthcare Whistle Blowing", Monash
Bioethics Review. 2004; 23(4): 4155

13
European Environment Agency) (Jan 23, 2013). "Late lessons from early warnings: science, precaution,
innovation: Full Report". p. 614.

Whistleblower Policy: A scientific approach Page 9

Some of the companies that have given importance to this policy are:
1. LIC Housing Finance Ltd.: The Company has whistleblower policy and adheres to norms
relating to the same.
14

2. The Great Eastern Shipping Co. Ltd.: The Company has established a Whistle Blower
Policy with a view to provide a mechanism for employees to report to the management
concerns about unethical behavior, fraud, etc. The Policy also provides for adequate
safeguards against victimization of employees who avail of the mechanism and also
provides for direct access to the chairman of the Audit Committee.
15

3. Asian Paints Ltd.: The Board of Directors of the Company at their meeting held on 25th
June, 2009 approved and adopted the Whistle-Blower Policy of the Company with an
objective to establish a formal mechanism to provide protection to the employees of the
Company from unethical work practices and irregularities.
16

4. IDFC: Although it is not mandatory the Board of IDFC has also adopted Whistle Blower
Policy.
17

5. Castrol India Ltd.: Presently, the Company does not have a Whistle Blower Policy but
has a policy similar to it for the entire BP Group of Companies worldwide which is called
Open Talk. No personnel of the Company have been denied access to the Audit
Committee.
6. Kotak Mahindra Bank: The Bank has adopted the Whistle Blower Policy pursuant to
which employees of the Bank can raise their concerns relating to the fraud, malpractice or
any other untoward activity or event which is against the interest of the Bank or society
as a whole.
18





14
http://www.lichfl.com/lichousing/aboutus/whistleblower.asp
15
http://money.livemint.com/IID93/F100620/AccountingPolicies/Company.aspx
16
http://www.asianpaints.com/pdfs/company-info/investors/coc_employees.pdf
17
http://www.idfc.com/pdf/whistle_blower_policy.pdf
18
http://www.kotak.com/annualreport2012-13/pdf/Business_Responsibility_Report.pdf
Whistleblower Policy: A scientific approach Page 10

3.2 Whistleblower Protection in India-Need and Importance
Whistleblower protection refers to laws and policies meant to protect anyone who exposes
alleged wrongdoing.
19
The wrongdoing might take the form of fraud, corruption or
mismanagement.
A few instances of worms in Dairy Milk bars
20
were reported in Maharashtra, following which
ad campaigns roping in Big B and revamping of packaging took place as an effort to win back
their eroded image and consumer confidence. This cost Cadbury a good Rs.150 million on
packaging expenses and 15% up on advertisement costs.
21

Coca-Cola India has been fighting a legal battle over allegations that its largest plant in India
22
,
at Plachimada has been responsible for environmental damage in the area. In a major step
towards holding Coca-Cola accountable for damages it has caused in India, the State
Government of Kerala decided to move forward with the formation of a tribunal that will hear
and award compensation claims against the Coca-Cola Company. The Kerala State cabinets
decision is based on the report and recommendations of a high-power Committee which released
a report on March 22, 2010 holding Coca-Cola responsible for causing pollution and water
depletion in Plachimada in the State of Kerala in southern India. Using the polluter pays
principle, the highpower committee had recommended that Coca-Cola be held liable for Rs. 216
crore (US $ 48 million) for damages caused as a result of the companys bottling operations in
Plachimada.
23

Cadburys worm battle and Cokes water contamination combat are classic examples of blown
whistles. If timely alerts were sent out through internal whistle-blowing the companies could
have perhaps saved themselves of serious brand tarnishing and grave financial blows.
Several other corporate collapses
24
like Enron, WorldCom, Satyam, Global Trust Bank, UTI
scam, Siemens bribing scam in Germany to gain contracts, Harshad Mehta and Ketan Parekh
scam, have quaked up the investors reliance on governance.

19
http://www.investopedia.com/terms/w/whistleblower.asp Retrieved 2014-04-03.
20
http://www.rediff.com/money/2006/dec/24cad.htm Retrieved 2014-04-03.
21
http://www.rediff.com/money/2006/dec/24cad.htm Retrieved 2014-04-03.
22
http://realtime.rediff.com/news/realtime/CocaCola-breach-impacts-74k-employees-and
contractors/7f08a9f784bbf140?src=interim_alsoreadimage Retrieved 2014-04-04.
23
http://www.indiaresource.org/campaigns/coke/ Retrieved 2014-04-04.
24
India doesn't have a law to protect whistleblower". Times of India. Mar 29, 2010. Retrieved 4 April 2014.
Whistleblower Policy: A scientific approach Page 11

Further there have been multiple instances of threatening, harassment and even murder of
various whistleblowers.
25

26
An engineer, Satyendra Dubey, was murdered in November
2003.Dubey had blown the whistle in a corruption case in the National Highways Authority of
Indias Golden Quadrilateral project.
27
Two years later, an Indian Oil
Corporation officer, Shanmughan Manjunath, was murdered for sealing a petrol pump that was
selling adulterated fuel.
28

29

A Karnataka official SP Mahantesh, said to be a whistle-blower in controversial land allotments
by societies was murdered in May 2012. Mahantesh was working as Deputy Director of the audit
wing in the states Cooperative department and had reported irregularities in different societies
involving some officials and political figures.
30
A senior police officer alleged that Mayawati's
government was corrupt and had embezzled large amounts of money. Shortly thereafter, he was
sent to a psychiatric hospital.
31

Thus, the activists demanded that a law should be framed to protect the whistleblowers, to
facilitate the disclosure of information and uncover corruption in government organizations.
32

Whistle Blowers Protection Bill was approved by the Cabinet of India as part of a drive to
eliminate corruption in the country's bureaucracy
33

34
and passed by the Lok Sabha on 27
December 2011.
35
The Bill was passed by Rajya Sabha on 21 February 2014 and is waiting

25
"A law for those who speak up". The Hindu. May 22, 2012. Retrieved 5 August 2014.
26
MGNREGA activist's murder, http://articles.timesofindia.indiatimes.com/2011-03-04/india/28659059_1_mgnrega
jharkhand-social-activists Retrieved 5 April 2014.

27
Truth Silenced" pages on Satyendra Dubey Murder case". rediff.com. Retrieved 5 April 2014.
28
Manjunath case: court commutes death sentence". The Hindu. Dec 12, 2009. Retrieved April 4, 2014.

29
"Manjunath murder: Death penalty commuted to life-term". Zee News. Dec 12, 2009. Retrieved April 4, 2014.
30
Whistleblower pays with life, http://www.thehindu.com/news/national/karnataka/article3438966.ece Retrieved
April 2014

31
UP cop calls Mayawati govt corrupt, dumped in mental asylum - The Times of India". indiatimes.com. 5
November 2011. Retrieved 5 April 2014.
32
http://timesofindia.indiatimes.com/india/Centre-awaits-report-from-Jharkhand-in-MGNREGA-activists-
murder/articleshow/7628672.cms?referral=PM Retrieved 5 April 2014.
33
"Whistleblowers Protection Bill soon, Govt tells RS". The Times Of India. 10 July 2009. Retrieved 2014-04-01.
34
"Cabinet clears whistleblower protection Bill". The Hindu. 10 August 2010. Retrieved 2014-04-04.
35
http://www.prsindia.org/uploads/media/Public%20Disclosure/whistle%20blower%20as%20 Retrieved 2014-04-
03.
Whistleblower Policy: A scientific approach Page 12

for President's assent.
36
The Bill will also ensure punishment for false or frivolous complaints.
The bill has faced considerable criticism because its jurisdiction is restricted to the government
sector and encompasses only those who are working for the Government of India or its agencies.
It does not cover the state-government employees. However, the draft bill aimed at protecting
whistleblowers is seen as a welcome move.
37


Chapter 4: Whistle blower policy as a mechanism of corporate Governance: A scientific
Approach
It can be seen that the whistle blower policy has been evolved as a new scientific approach
towards corporate governance. Mere bringing in the whistle-blower policy in an organization
does not necessarily result in successful functioning of the whistle-blower mechanism. It has to
be put into action by creating awareness, propagating the policy, and assuring that no reprisal
would be met against the whistle-blowers. To safeguard themselves from the consequences of
reporting a wrongdoing known or observed, employees across organizational hierarchies are
tight-lipped and fearful to blow whistle against their colleagues, their business associates
(vendors, customers, etc.) or their higher ups. Employees consider silence as golden in the wake
of surviving in the workplace. This is detrimental to both the individual and the organization.
Employees being closer to the organization would be in a better position to uncover corporate
misbehavior. Corporate need to decide whether they would welcome alerts through internal
whistle blowing and take corrective actions internally or be faced with the implications of
unsolicited alerts from external sources, thereby endangering their goodwill and reputation. The
Association of Certified Fraud Examiners have highlighted five reasons for Why Employees
Dont Report Unethical Conduct :No corrective action, No confidentiality of reports, Retaliation
by superiors, Retaliation by co-workers and Unsure whom to contact
Several corporate collapses like Enron
38
, WorldCom
39
, Satyam
40
, Global Trust Bank, UTI
scam
41
, Siemens bribing scam in Germany to gain contracts, Harshad Mehta and Ketan Parekh

36
"Indian Parliament passes Whistleblowers Protection Bill 2011". IANS. news.biharprabha.com. Retrieved 1 April
2014
37
The Whistle Blowers Protection Bill, 2011". Prsindia.org. Retrieved 2014-04-04.
38
Jerry W. Markham, A financial history of modern U.S. corporate scandals: from Enron to reform.
Whistleblower Policy: A scientific approach Page 13

scam
42
, have quaked up the investors reliance on governance. This has now surfaced the need
for reinforcement of a mechanism to escalate misconduct to the appropriate authorities at the
right time. Whistle blowing is thus a positive move towards Corporate Collapse.

















39
After falling share prices, and a failed share buyback scheme, it was found that the directors had used fraudulent
accounting methods to push up the stock price. Rebranded MCI Inc, it emerged from bankruptcy in 2004 and the
assets were bought by Verizon.
40
http://timesofindia.indiatimes.com/city/hyderabad/Hearing-begins-in-Satyam-scam
case/articleshow/33255804.cms Retrieved 5 April 2014
41
http://www.bannedthought.net/India/PeoplesMarch/PM1999-2006/archives/2001/sep2k1/uti.htm
42
http://top10scamsofindia.blogspot.in/2011/10/harshad-mehta-ketan-parekh-stock-market.html
Whistleblower Policy: A scientific approach Page 14

CONCLUSION
Corporate collapse has surfaced the need for reinforcement of a mechanism to escalate
misconduct to the appropriate authorities at the right time. Mere bringing in the whistle-blower
policy in an organization does not necessarily result in successful functioning of the whistle-
blower mechanism. It has to be put into action by creating awareness, propagating the policy,
and assuring that no reprisal would be met against the whistle-blowers.
The Whistle-Blower Policy should clearly state that anonymity of the informant will be
maintained, The authenticity of the information will be confirmed and there will be no reprisal
for reporting the information, Appropriate and disciplinary action will be taken after
investigation and on confirmation of the information.
To safeguard themselves from the consequences of reporting a wrongdoing known or observed,
employees across organizational hierarchies are tight-lipped and fearful to blow whistle against
their colleagues, their business associates or their higher ups. Employees consider silence as
golden in the wake of surviving in the workplace. This is detrimental to both the individual and
the organization. Employees being closer to the organization would be in a better position to
uncover corporate misbehavior. Corporate need to decide whether they would welcome alerts
through internal whistle blowing and take corrective actions internally or be faced with the
implications of unsolicited alerts from external sources, thereby endangering their goodwill and
reputation.
The policy must be more than words on paper. Writing a policy, adopting it, and then going on
with business as usual will do nothing to protect company or to improve ethical conduct. The
policy must reflect the real commitment of organization to prevent retaliation against employee
whistleblowers; encourage employees with ethical concerns to discuss them internally rather
than externally; and create an overall environment within which employees have the opportunity
and desire to behave ethically and responsibly. In this way, the corporations will work
efficiently.
Thus, whistleblower policy is a scientific approach towards corporate governance and a positive
step towards corporate governance.
Whistleblower Policy: A scientific approach Page 15

References:
Alexander Hamilton Institute. Whistle blowing: A New Perspective on an Old Issue. New
Jersey, 2002.
Bagley, Constance E. Managers and the Legal Environment: Strategies for the 21st
Century. St. Paul, Minn.: West Publishing Co., 1991.
Trevino, Linda K. and Nelson, Katherine A. Managing Business Ethics: Straight Talk
About How to Do It Right. New York: John Wiley and Sons, 1999.
Vinten, Gerald, ed. Whistle blowing: Subversion or Corporate Citizenship? New York:
St. Martin's Press, 1994.
Westin, Alan F., Kurtz, Henry I., and Robbins, Albert. Whistle blowing: Loyalty and
Dissent in the Corporation. New York: McGraw-Hill, 1981.
"Component of Whistleblower Policy". InternalAuditExpert. Retrieved 4 April 2014.
Mary Rowe, "Options and choice for conflict resolution in the workplace"
in Negotiation: Strategies for Mutual Gain, by Lavinia Hall (ed.), Sage Publications, Inc.,
1993, pp. 105119.
Why Your Company Should Have A Whistle blowing Policy by Tim Barnett, Assistant
Professor of Management, Louisiana Tech University Sam Advanced Management
Journal, Autumn, 1992, pp. 37-42.
http://www.wanttoknow.info/911/911_summary_articles/020521coleenrowleymemofbidi
rectormueller. Retrieved 2014-04-04.
http://www.sebi.gov.in/cms/sebi_data/attachdocs/1357290354602.pdf
Faunce, T.A. "Developing and Teaching the Virtue-Ethics Foundations of Healthcare
Whistle Blowing", Monash Bioethics Review. 2004; 23(4): 4155
European Environment Agency) (Jan 23, 2013). "Late lessons from early warnings:
science, precaution, innovation: Full Report". p. 614.
http://www.asianpaints.com/pdfs/company-info/investors/coc_employees.pdf
http://www.idfc.com/pdf/whistle_blower_policy.pdf
http://www.kotak.com/annualreport2012-13/pdf/Business_Responsibility_Report.pdf
http://www.rediff.com/money/2006/dec/24cad.htm Retrieved 2014-04-03.
http://www.rediff.com/money/2006/dec/24cad.htm Retrieved 2014-04-03.
Whistleblower Policy: A scientific approach Page 16

http://realtime.rediff.com/news/realtime/CocaCola-breach-impacts-74k-employees-and
contractors/7f08a9f784bbf140?src=interim_alsoreadimage Retrieved 2014-04-04.
http://www.indiaresource.org/campaigns/coke/ Retrieved 2014-04-04.
India doesn't have a law to protect whistleblower". Times of India. Mar 29, 2010.
Retrieved 4 April 2014.
"Indian Parliament passes Whistleblowers Protection Bill 2011". IANS.
News.biharprabha.com. Retrieved 1 April 2014
The Whistle Blowers Protection Bill, 2011". Prsindia.org. Retrieved 2014-04-04.
Jerry W. Markham, A financial history of modern U.S. corporate scandals: from Enron
to reform.
"A law for those who speak up". The Hindu. May 22, 2012. Retrieved 5 August 2014.
MGNREGA activist's murder, http://articles.timesofindia.indiatimes.com/2011-03-
04/india/28659059_1_mgnrega jharkhand-social-activists Retrieved 5 April 2014.
Truth Silenced" pages on Satyendra Dubey Murder case". rediff.com. Retrieved 5 April
2014.
Manjunath case: court commutes death sentence". The Hindu. Dec 12, 2009. Retrieved
April 4, 2014.
"Manjunath murder: Death penalty commuted to life-term". Zee News. Dec 12, 2009.
Retrieved April 4, 2014.
"Whistleblowers Protection Bill soon, Govt tells RS". The Times Of India. 10 July 2009.
Retrieved 2014-04-01.
"Cabinet clears whistleblower protection Bill". The Hindu. 4 August 2010. Retrieved
2014-04-04.
.