Mechanism for whistle-blowing frauds is still ‘cosmetic’ in corporate India. A recent Deloitte study said despite recognition of whistleblower hotlines as a key channel to detect frauds, India has had very little success in this area because of a casual ‘tick-in-the-box’ approach in planning and implementing whistleblower programmes.

While 90 per cent of respondents agreed that establishing a whistleblower hotline could help reduce fraud, only 68 per cent said they were actually equipped with such a hotline or policy. However, in case of existing whistle-blowing programmes the respondent indicated that they were unable to utilise the existing channels to detect frauds.

The report said some common aspects overlooked in the programmes were: hotlines that function only for specific durations, , local language support and lack of trained call handlers.

“What they (companies) need to understand is that whistle blowing channels are perhaps the only source that can help detect fraud in their early stages. Companies need to build an employee/stakeholder-friendly whistle-blowing programme,” said Rohit Mahajan, Senior Director and Head, Forensic, Deloitte in India.

The management’s commitment to the programme and periodic communication about the actions taken on complaints were rare, the report said.

“Companies should focus their communication on assuring employees that their tips will remain confidential. To demonstrate this, they may publish internal suitably anonymous examples of where a whistleblower system report led to an investigation and appropriate disciplinary action against those found to have violated the companies’ policies,” Mahajan said.

“We have seen several instances where hotlines are managed by administrative or human resources professionals within the company, posing challenges to the anonymity of complaints and whistleblowers,” said Mahajan. Hotlines handled by third parties were seen by 43 per cent of respondents as a solution.

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