In 2003, Satyendra Dubey, a government engineer who exposed corruption in the national highway building program was found murdered and two years later, Shanmughan Manjunath, a manager at a state-owned oil company, who laid bare a scheme to sell impure gasoline was found riddled with bullets in the back seat of his car. This has been the history of whistle blowing in our country! Is India Inc. doing anything to protect these whistleblowers?It was recently reported that a certain company is under scrutiny by several government agencies and is being investigated for a host of alleged irregularities in its operating and financial processes. The case has come to the attention of the authorities only because they received a tip-off from an employee of the company who saw what was happening. If ‘whistleblowers’ had not come forward, many corrupt organisations would still be going about their illegal business. It is not a widely known fact that 60% of company fraud cases are discovered because of tip-offs received from employees. Prevention better than cure
Since many companies suffer because of internal fraud, they need to have robust processes in place to prevent fraud. So, how can companies keep a tab on such things happening within the organisation?
According to Ajay Trehan, founder & CEO, AuthBridge, “An organisation needs to set up strong internal controls and should have regular and surprise audits by an external agency. It should make the office comfortable where staff/employees can approach the boss without reservation. It should have an open-door policy. Another practice would be to have an anonymous hotline system. Also, one should not place all financial responsibilities in one person’s hands; segregate and rotate duties.”
Ravi Verma, president and head – HR, Nucleus Software expresses, “Fraud management continues to be a critical function especially in the financial services industry. Technology solutions are expanding yet capabilities to arrest superior fraud are yet to be evolved. Fraud risk assessment can be one pro-active method to identify areas that pose a higher risk of fraud. Key stakeholders in the assessment can be internal auditors, general counsel, compliance officers, and other executives.” Dr Pallab Bandyopadhyay, director – human resources, Citrix Systems suggests, “Hire right and trust workflow automation! Have the business rules set in place, do regular audits and more importantly, have 40% of the budget of automation for upgrades and new business rule implementations. These would at least ensure most of the possible frauds are prevented. More importantly, ensure that whatever is approved for senior management is seen as being fair. A fair culture tends to prevent frauds.”
Iti Kumar, VP – human resource, GlobalLogic, further states, “Companies must also have various tools/communication channels which mitigate the possibilities of such internal frauds. Such tools could be in line with Whistle Blower Policy, committees, forums, etc. An open and transparent culture which allows employees to raise concern over wrongdoing in the organisation can only help in reducing the possibility of such frauds.”
Another study has revealed that 74 percent of employees have first-hand knowledge of wrongdoing within the company. But the repercussions of becoming a whistleblower can be huge for an employee. And unfortunately, in India, not many companies have policies to protect a whistleblower. Whistle-blowing employees are very unlikely to report fraudulent activities to internal audit or similar departments as they fear repercussions like the loss of the job or persecution. In such cases, how can an organisation protect that employee from any future repercussions and ensure his/her safety?
Bandyopadhyay suggests, “Have an ombudsman system in place, ensure complete confidentiality of the employee’s identity and ensure that justice is done no matter whatever be the hierarchy of the complainant and the accused. Any compromise in the confidentiality of the whistleblower needs to be handled severely.”
At GlobalLogic, the whistleblower policy was introduced to allow and encourage employees to bring to the management’s notice anything unethical or unprofessional happening including violation of core values in the company in order to ensure timely and appropriate action thereby ensuring transparency in the organisation. “The policy provides complete confidentiality and anonymity of the user who is blowing the whistle. In alignment with the core value of openness in the current policy, the employee has the option to reveal his/her name while blowing the whistle. It is essential to ensure confidentiality and trust in the entire process,” informs Kumar.
“To feel comfortable exposing fraud, potential whistleblowers need to know that they will be protected if they make disclosures. This protection can only come from laws, organisation policies, procedures and similar past examples that effectively prevented all retaliation, encouraged and fully protected whistleblowers who voluntarily disclosed wrongdoing,” states Verma. Trehan further adds, “There should be strong HR policies to safeguard such employees. Limit the whistleblower’s identity to as few people as possible. Give him/her total anonymity. There is a proposed bill on the drawing board for the protection of whistleblowers. It is The Public Interest Disclosure (Protection of Informers), Bill. It is still to be presented to Parliament. However, the suggested law has one big gap. It does not include corporate/private sector whistleblowers.”
Each and every employee in an organisation has the right to highlight any breach in policies, fraudulent acts and non-alignment to company core values. But, it is suggested that this be done very cautiously keeping the company’s policy for whistleblowers in mind. So, be ethical and be careful at the same time!
Source: Times Ascent
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