Companies Act 2013

Whistle-blowing mechanism

Companies Act 2013

  • Share

Section 177 of the Companies Act 2013 states that every listed company needs to establish a vigil mechanism for its directors and employees to report genuine concerns in the prescribed manner.

Reference

Provision

Synopsis

Sec 177 (9)

  • Establishment of “vigil mechanism”
  • Every listed company, or such class or classes of companies, as may be prescribed, to establish a vigil mechanism for directors and employees to report genuine concerns in such manner as may be prescribed.

Sec 177 (10)

  • Safeguards against victimization
  • Policy against victimization of persons using the mechanism
  • Provide for access to Chairperson of Audit Committee in appropriate or exceptional cases
  • Display policy on the company website
  • “Vigil mechanism” to be included in Board’s report

Schedule IV

  • Code for independent directors
  • Ascertain and ensure that the company has an adequate and functional mechanism
  • Ensure that the interests of individuals who use the mechanism are not prejudicially affected