Lecture Notes: Vigil Mechanism

Introduction

• The speaker discussed the chapter on stakeholders.
• Topic: Understanding Vigil Mechanism.

Meaning of Vigil Mechanism

• Raising an alert about any kind of corruption or illegal activities occurring in an organization or company.
• It is meant to expose those secrets and wrongdoings committed by people in power.

Types of Vigil Mechanism

1. Internal Whistleblower: Reporting information from within the company.
2. External Whistleblower: Reporting through media or public channels.
3. Alumni Whistleblower: Reporting information by a former employee.
4. Open Whistleblower: Reporting information without concealing one's identity.
5. Personal and Impersonal Whistleblower: Exposing mistakes at a personal or organizational level.
6. Government and Corporate Whistleblower: Reporting at the government or corporate level.

Legal Framework

• Whistleblower Protection Act 2014: For non-corporate cases.
• Companies Act: Through Audit Committee and LDR Regulation.
• CVC (Central Vigilance Commission): Handles complaints against government officials.

Whistleblowing Process

• Seven years to file a complaint.
• The identity of the complainant will be kept confidential.
• Anonymous complaints are not acceptable.
• Appeals can be made in the High Court.
• Special Protection Group (SPG) handles the complaints.

Corporate Reporting

• Auditors must mention the vigil mechanism in their report.
• Companies must provide policy information on their website.

LDR Regulation

• Audit Committee must formulate a vigil mechanism policy.
• Details of the policy must be provided on the website and in the annual report.

Vigil Mechanism under the Companies Act

• Mandatory for listed companies and specially prescribed companies.
• Operated by Audit Committee or directors.
• Provides protection to concerned parties.

Conclusion

• Complete information about the legal aspects and processes of vigil mechanism and whistleblowing was provided.
• Case studies and their impacts were discussed.

Homework

1. Write brief notes on the types of whistleblowers.
2. Focus on the reporting requirements of the Companies Act.