MUMBAI: Indian companies lag behind their global counterparts in putting in place an effective whistle blower mechanism in their organisations. According to the latest study by Ernst & Young (EY), only 22 per cent of the respondents had implemented the whistle blower framework as they considered the structured mechanism integral to their business operations.
The survey noted that while a majority of respondents assented to having a whistle blowing mechanism, only 13 per cent were fully compliant with the Companies Act 2013. Many organisations undertake the responsibility of implementing and maintaining a whistle blowing framework internally. While this may sound good in principle, EY however believes that experts should deal with some of the critical aspects of the whistle blower mechanism.
The survey noted that only 32 per cent of the respondents had outsourced the whistle blowing mechanism to third party service providers. While many global reports suggest hotlines as one of the most effective channels for a strong whistle blowing mechanism, the survey revealed that only half of the respondent organisations had put in place a hotline as a channel of reporting. A recent report released by the Association of Certified Fraud Examiners stated that organisations with hotlines were much more likely to catch fraud as it is the most effective way to detect fraud.
